Nguyen v Chief Commissioner of State Revenue [2006] NSWADT 237

CITATION: Nguyen v Chief Commissioner of State Revenue [2006] NSWADT 237

DIVISION: General Division

APPLICANT PARTIES: Renae Nguyen RESPONDENT Chief Commissioner of State Revenue

FILE NUMBER: 053074

HEARING DATES: 30/11/2005

SUBMISSIONS CLOSED: 11/30/2005

DATE OF DECISION: 08/09/2006

BEFORE: Greenwood J - Judicial Member

CATCHWORDS: first home owners grant - reversal of original decision - First Home Owners Grant Act - first home owners grant - reversal of original decision

MATTER FOR DECISION: Principal matter

LEGISLATION CITED : First Home Owners Grant Act 2000

APPLICANT In person REPRESENTATION: RESPONDENT S Free, solicitor

ORDERS: The decision of the Chief Commissioner of State Revenue is affirmed

Reasons for Decision THE FACTS 1 The applicant lodged an application for the First Home Owners ("FHOG") grant by online/email application on the 25 June 2002. 2 The applicant entered into a contract of sale dated 11 August 2002 for the purchase of a property located at 111 High Street, Cabramatta (the subject property). The subject property consisted of two lots, namely lot 279 and lot 280, Section 6, in Deposited plan 1553 for a single consideration price of $282,600.00. The completion\settlement date for that property was 23 September 2002. 3 A second "hard copy" FHOG application (produced to the Tribunal as exhibit "4" by the applicant), completed in handwriting was also subsequently signed by the applicant on the 5 September 2002 and a copy was lodged with the Chief Commissioner's office at some time thereafter. This document bears the signature and notation of a bank officer, Loc Ta and was signed by the applicant. 4 On the 16 September 2002 the grant of $7,000.00 was paid to the applicant. 5 The Vendor of the subject property continued to reside in the property for about two weeks after the completion date. 6 On the 1 February 2003, the applicant entered into a building contract with Tan Duc Nguyen of Glowhome Constructions Pty Ltd and pursuant to that contract the Builder was the person authorised to obtain building approvals, and the contract indicated no cost allowance for demolition. 7 On or about 20 February 2003 the Local Council issued a letter to the Applicant indicating that the proposed plans lodged with it had deficiencies and required such deficiencies to be rectified, before any building or development approvals would be granted. 8 By the 17 March 2003, the applicant withdraws her original development application and sought to relodge a new application to address the deficiencies raised by the Council within a further 1 month period. The new application is acknowledged by the Council on 1 May 2003. 9 By Notice of determination No 713/2003 issued by Fairfield City Council dated 2 July 2003 issued its consent to demolition of the existing dwelling and the approval of plans for a housing development comprising of two attached two story dwellings and garage and described as "Duplex" development 10 On the 28 September 2003 the applicant's father died. 11 On the 25 October 2003 the applicant marries Hieu Trung Le. 12 Completion of the new Duplex development appears to have occurred on or about the date of issue of the Council Occupation Certificate dated 25 November 2003. 13 The applicant took occupation of one of the duplex dwelling houses in or about 5 December 2003. The other duplex dwelling house was occupied by the applicant's brother in law and his family. 14 The applicant was selected by the Chief Commissioner's office by random audit on or about June 2004 to provide evidence of eligibility and compliance with the terms of the grant. On the 27 September 2004 the Commissioner's office issued a Notice to the applicant to repay the FHOG with a penalty of 20%. The Commissioner resolved the issue of penalty and reversed its decision on that issue. 15 The applicant applies to the Tribunal for a review of the Commissioner's decision pursuant to S.28 of the First Home Owners Grant Act 2000 for a review of the original decision for her to repay the full grant amount of $7,000.00 First Home Owners grant. THE EVIDENCE 16 The applicant filed a considerable amount of material in exhibit "1" being copies of her building contract, photographs of the subject property in its original condition and at different stages of construction of the new building, letters from the Local Council. In addition the applicant filed statements in written form as Exhibits "3" and "4". The applicant also gave verbal evidence during the hearing. 17 The applicant's main point of contention was that she had relied on information provided to her by the Bank officer Loc Ta when she signed the second FHOG (being produced by the applicant as Exhibit "4") dated 5 September 2002. That document clearly showed on the face of it "Date you expect to occupy home?" the answer given was "23/09/2002" which corresponded with the completion date. 18 On the same form the eligibility checklist has been marked in points 1 to 7 as "Yes". The applicant contended that she had in fact complied with point 7 of the form, which consisted of 3 categories: * entered into a Contract for the purchase of a home on or after 1 July 2000 * signed a contract to have a home built on their vacant land on or after 1 July 2000. * in cases of an owner-builder, commenced laying of foundations of a home on their vacant land on or after 1 July 2000. 19 The contract of sale which the applicant entered into was for a pre-existing home located on two lots with a completion date and a date of occupation being specified as 23 September 2002, which was the date from which the residency condition was to commence. The Council Notice of determination for the demolition and rebuilding of the duplex was not issued until 2 July 2003. There is an unequivocal acceptance of the position by the applicant that she did not enter into occupation of the existing home purchased up until the time the Council approved the demolition of the same, or the actual demolition. The applicant only occupied one of the newly built duplex dwellings. 20 On the verbal evidence given by the applicant at the hearing she deposed to the state of the existing dwelling being very dirty, having a broken window and likened to a shed; that it was her intention not to enter into occupation of it, but to demolish the dwelling house on the property. The applicant did not produce any photographic evidence to support her contention as to the internal condition of the property other than annexure "A" to exhibit "1" showing an outside photograph of a modest 1960's fibro residence. 21 In addition, the applicant gave verbal evidence that she had purchased the subject property with the financial assistance of her brother-in-law and that the brother-in-law, his family and his parents currently occupied the other duplex dwelling. 22 The applicant submitted that she entered into the building contract within 12 months of the purchase completion date and tendered that the FHOG Application form (exhibit "4") allowed her to enter into occupation within 12 months of the completion of the construction date, which she had complied with. There is no evidence that the applicant notified the Commissioner as to her proposed building plans or sought any extension of time for occupancy. THE LEGISLATION 23 Section 7 of the First Home Owners Grant Act 2000, which was amended and as applied to this applicant at the relevant time and set out the criteria for eligibility, was: Section 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". 24 Pursuant to s 7(1)(a) the applicant must satisfy the five eligibility criteria contained in Division 2 of Part 2. The fifth criterion is set out in Section 12(1). Section 12 Criterion 5 – Residence Requirement (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 12 months after completion or a longer period approved by the Chief Commissioner. 25 Section 13 specified "Eligible Transactions" into the three categories which were the same as those on the front page of the application in exhibit "4". 26 The Commissioner may authorise the payment in anticipation of the residence criterion being met. REASONS AND ORDERS 27 The applicant in her submissions seeks to combine 2 of the 3 categories of eligible transactions into the purchase of the subject property, coupled with the contract for building and it is clear that Section 13 sets out each of the three, as separate categories, not a combination of any three. In this matter the applicant's building contract is not of the type envisaged by the legislation namely "a comprehensive building contract" for the sole benefit of the applicant and which seeks to imply house and land package sale contracts - contemplates vacant land and "owner builders" where the land is purchased as vacant land. 28 In the facts of this case, the applicant purchased the subject property as an existing combination of the land with an existing dwelling house built over two lots and it was the first of the three categories identified in Section 13 (1)(a) - contract for the purchase of a "home" and by implication a reference to the existing dwelling house. On the applicant's verbal evidence she did not intend to occupy the dwelling house as her residence – her intention was always to demolish it and build the duplex development with two dwellings, for which she required the additional financial assistance of her brother-in-law and who ultimately became the occupant of the second duplex dwelling house. The applicant did not occupy the approved transaction within the required period specified by the legislation. 29 The Commissioner was never provided with an application for a "comprehensive building contract" or an "Owner Builder's application "as clearly on the evidence submitted the building contract with Glowhome Constructions Pty Ltd and its Director Tan Duc Nguyen did not come into existence until 1 February 2003. 30 Accordingly the residency requirement was not met and pursuant to s. 20(3) the Commissioner is entitled to seek repayment of the grant from the applicant and the Commissioner's decision is affirmed.