Nairn v Chief Commissioner of State Revenue [2011] NSWADT 41

Administrative Decisions Tribunal New South Wales Medium Neutral Citation: Nairn v Chief Commissioner of State Revenue [2011] NSWADT 41 Hearing dates: 11 October 2010 - Submissions closed: 11 October 2010 Decision date: 02 March 2011 Jurisdiction: Revenue Division Before: M Hirschhorn, Judicial Member Decision: The decisions of the Respondent are affirmed. Catchwords: First Home Owner Boost for New Home and NSW New Home Buyer's Supplement Legislation Cited: First Home Owner's Grant Act 2000 Administrative Decisions Tribunal Act 1997 Cases Cited: McTackett v Chief Commissioner of State Revenue [2003] NSWADT 154 Category: Principal judgment Parties: Deborah Kate Nairn (Applicant) Chief Commissioner of State Revenue (Respondent) Representation: Counsel: E Bishop (Respondent) G Nairn, as agent (Applicant) File Number(s): 106038

reasons for decision

Introduction 1The Applicant seeks review of a decision of the Respondent that the Applicant was not eligible for the First Home Owner Boost for a new home ("the Boost") and the NSW Home Buyer's Supplement ("the Supplement") in respect of a home unit she purchased in Queanbeyan ("the Queanbeyan unit"). 2In short, the Respondent decided that the Queanbeyan unit was not a "new home" pursuant to the relevant legislative provisions in the First Home Owners Grant Act 2000 (NSW) ("FHOG Act") because it had previously been sold as a place of residence.

Facts 3In May 2009, the Applicant responded to an advertisement by a real estate agency in respect of a unit in a development in its early stages of construction in Queanbeyan. 4At that time, the Applicant gave evidence that she understood that the developer had commissioned the real estate agency to sell the units prior to construction of the building. The Applicant also understood that any purchase by her of a unit in the development would be finalised on construction of the building and the creation of a strata title for the unit. 5On about 9 May 2009, the Applicant inspected the overall development site and looked at the floor plans. On 15 May 2009, she paid the real estate agent a holding deposit of $2,000 in respect of the Queanbeyan unit (to be constructed). 6In July 2009, the Applicant sought approval from a bank for finance which was subsequently approved. 7On 8 August 2009, the Applicant inspected the Queanbeyan unit. She saw that it was structurally complete but fit-out was yet to commence. 8On 20 August 2009, the Applicant signed a contract to purchase the Queanbeyan unit. She saw when she signed the contract that the vendor was not the developer but rather a person called Mr Moufarrige. The Applicant said in evidence that it wasn't until later, however, that she realised that Mr Moufarrige had actually contracted to purchase the Queanbeyan unit himself from the developer on 20 May 2008. 9The Applicant also said in evidence that she recalled signing the contract much earlier at her solicitor's office on 4 June 2009 although noted that the "official record" shows the date as 20 August 2009. 10On 30 September 2009, the Applicant inspected the Queanbeyan unit again as settlement of her contract was to occur the next day. She said construction was complete although some access-ways had still to be cleared, landscaping to be completed and some builder's rubble to be removed. 11The parties agreed at the hearing that construction of the building was completed in September 2009 and the Strata Plan SP82725 was registered on 17 September 2009. 12Settlement of the Applicant's purchase of the Queanbeyan unit occurred on 6 October 2009. The Applicant explained that it was originally to occur on 1 October 2009 but was delayed due to a slip up by her bank. 13The Applicant was informed by the solicitor that acted for her that the abovementioned settlement occurred "simultaneously" with the settlement of the purchase of the Queanbeyan unit from the developer by Mr Moufarrige. In other words, on 6 October 2009, the developer transferred the Queanbeyan unit to Mr Moufarrige and Mr Moufarrige transferred the Queanbeyan unit to the Applicant. 14The Applicant's bank applied on her behalf for the First Home Owner Grant (FHOG), the Boost and the Supplement. 15The Respondent approved the provision of the FHOG to the Applicant but did not allow the Boost or the Supplement. 16It was not in dispute between the parties at the hearing, that Mr Moufarrige did not at any time physically occupy the Queanbeyan unit. 17The Applicant gave evidence and the Tribunal accepts that she was the first person to receive keys to the Queanbeyan unit from the real estate agency and that she connected the utilities (e.g: electricity and gas). The Applicant was also the first person to pay rates for the Queanbeyan unit after the developer. 18It appears from the evidence, that Mr Moufarrige entered into his contract to buy the Queanbeyan unit on or about 20 May 2008. This was at a time before the construction of the building had been commenced. He then contracted to sell the Queanbeyan unit on 20 August 2009 to the Applicant (i.e. about 1 year, 3 months later), at a point in time when construction of the home unit was not yet complete and prior to registration of any strata plan. 19In other words, both of the abovementioned contracts were entered into "off the plan" as it is sometimes referred to. They were sales of a proposed "lot" in an unregistered strata plan. This fact was also confirmed by the real estate agent that acted for both the developer and Mr Moufarrige in relation to their "off the plan" sales to Mr Moufarrige and the Applicant respectively. 20The contract between the developer and Mr Moufarrige was tendered in evidence by the Respondent. The contract was based on the 2005 edition of the Standard Contract for the Sale of Land but contained a number of special conditions. Special condition 32 provided that the sale was subject to the registration of the strata plan and under special condition 32.2, completion was to be the later of 42 days after the date of the contract or 14 days after the vendor (developer) had given notice to the purchaser that the strata plan had been registered. The consideration on the contract was an amount of $255,000.00. 21The contract between Mr Moufarrige and the Applicant was also tendered in evidence by the Respondent. The contract was also based on the 2005 edition of the Standard Contract for the Sale of Land and contained a number of special conditions including, inter alia, the following: (i) The completion date on the front of the contract was marked with a reference to Special Condition 30. Special Condition 30.2 provided that the date for completion would be the 14 th day after the vendor gave notice to the purchaser of the registration of the strata plan. (ii) Special Condition 31 contained an acknowledgement by the purchaser (i.e. the Applicant) that the unit was sold as an " on-sale of the purchase of the unit under the Prior Contract " (italics added). The "Prior Contract" was defined in Special Condition 30(m) as the contract for the sale of the unit dated 20 May 2008 between the vendor (as purchaser) and the developer (as vendor). (iii) Various other special conditions in the contract made reference to the "Prior Contract" as well including special conditions 31, 32, 34, 35, 36 37, 38, 40, 41. (iv) The consideration stated on the contract was an amount of $285,000.00. 22In support of the Applicant's application for the Boost and Supplement, the solicitors that acted for Mr Moufarrige in respect of his sale of the Queanbeyan unit to the Applicant provided a letter to the Applicant dated 2 October 2009 (being 4 days before settlement of the contract) in the following terms: "We act for the seller in relation to this sale and confirm that the above property is newly constructed and it has never been occupied." 23The same solicitors also provided a further letter to the Applicant (dated 1 February 2010) in the following terms: "We act for the seller in relation to this sale. We confirm that the above property is newly constructed and has never been occupied. The seller purchased the unit off the plan in order to on-sell the property upon completion, and at no time intended to retain the property as an ongoing investment once completed, or to use the property as a principal place of residence." 24There was no evidence given by or on behalf of the developer for the purposes of the hearing. 25On or about 6 January 2010, the Applicant's solicitors wrote to the Respondent to request a review of any decision not to grant the Boost and the Supplement. 26On or about 15 January 2010, the Respondent refused to grant the Boost and the Supplement. 27On or about 21 January 2010, the Applicant objected to the Respondent's refusal to provide the Applicant with the Boost and the Supplement. 28On or about 29 March 2010 the Respondent disallowed the Applicant's objection. 29The Applicant then made an application to the Tribunal for review of the Respondent's decision.