Administrative Decisions Tribunal New South Wales Medium Neutral Citation: Fenton v Chief Commissioner of State Revenue [2012] NSWADT 96 Hearing dates: 15 May 2012 Decision date: 22 May 2012 Jurisdiction: Revenue Division Before: J. Block, Judicial member Decision: The decision under review is affirmed Catchwords: Principal place of residence - effect of clause 2 (2) of Schedule 1A- consideration of clause 12 of the same schedule Legislation Cited: Land Tax Management Act 1956 Cases Cited: Chief Commissioner of State Revenue v Aldridge & Anor (RD) (2003) NSWADTAP 50; Ghali v Chief Commissioner of State Revenue [2011] NSWADT 261; Chief Commissioner of State Revenue v Mesiti [2003] NSWADTAP 57; Chief Commissioner of State Revenue v Paspaley [2008] NSWCA 184; Aronstan v Chief Commissioner of State Revenue [2008] NSWADT 8; Category: Principal judgment Parties: Michael Fenton (Applicant) Chief Commissioner of State Revenue (Respondent) Representation: R Arnold (Agent, Applicant) Crown Solicitor (Respondent) File Number(s): 116059 REasons for decision Part A. Preliminary and background 1The decision under review is the disallowance by the Respondent (who is usually referred to in these reasons as "the Chief Commissioner") of an objection by the Applicant against a land tax assessment in respect of the property situated at 12 Central Avenue, Mosman ("the Mosman property") for the 2011 land tax year (and which is usually referred to in these reasons as "the relevant year"). 2The Tribunal had before it the documents lodged pursuant to section 58 of the Administrative Decisions Tribunal Act 1997; it also admitted into evidence exhibits as follows: Exhibit A1; a witness statement by the Applicant dated 23 January 2012; Exhibit R1; a witness statement by Rebecca Kiu (a solicitor in the employ of the Respondent) dated 8 March 2012; Exhibit R2; the first page of a contract dated 6 October 2011 for the sale of the Mosman property by the Applicant to Mr and Mrs Ters; (it may be noted that the Applicant is cited in Exhibit R2 as Michael Fenton of 18 Abbott Road North, Curl Curl). Ex facie that contract the Mosman property was sold for $1, 550,000, 3The Tribunal was furnished with a Statement ("the Statement") of Agreed Facts dated 15 February 2012 signed for on behalf of both parties; its content reads as follows: The parties agree as to the following facts: (1)On 7 August 1996, Michael Fenton became the registered proprietor of the property 12 Central Avenue, Mosman (folio identifier 61/4000) ("the Mosman property"). (2)After 7 August 1996, Michael Fenton lived at the Mosman property as his principal place of residence until on or about 29 November 2011. (3)From 24 April 2009, Michael Fenton and his de facto partner, Louise Anne Hewitt became the registered proprietors of the property 18 Abbott Road, North Curl Curl (folio identifier 24/1/5748) ("the Curl Curl property"). (4)After April 2010, Louise Anne Hewitt lived at the Curl Curl property as her principal place of residence. (5)Prior to April 2010, Michael Fenton lived at the Mosman property, as his principal place of residence. (6)From April 2010 to March 2011, Michael Fenton lived at the Curl Curl property 80% of the time and at the Mosman property 20% of the time. (7)Michael Fenton had moved into the Curl Curl property to assist with the renovation of the property. (8)From March 2011, after the completion of the renovation of the Curl Curl property, Michael Fenton lived at the Mosman property 90% of the time and at the Curl Curl property 10% of the time. 4It is relevant to note that at the commencement of the hearing Mr Gerard, on behalf of the Chief Commissioner, contended that the Statement contains an error in clause 2 in that it (erroneously) states that the Applicant lived in the Mosman property as his principal place of residence ("PPR") until November 2011. That that statement was inadvertently made is demonstrated by other parts of the Statement and in particular clause 5. Mr Arnold did not contradict Mr. Gerard's assertion that clause 2 as contained in the Statement was erroneous or that the Chief Commissioner was in any way precluded or stopped from referring to the true facts. That there is a dispute of fact between the parties is clear from the evidence and including without limitation the section 58 documents and Exhibit A1. The Respondent contends that the Mosman property was not the Applicant's PPR in respect of the relevant year. The Applicant in his objection against the assessment contended that each of the Mosman property and the Curl Curl property qualified as his PPR; in his letter dated 25 February 2011 attached to his objection he stated: "In reference to my 2011 Land Tax Assessment I have received advice that both 12 Central Avenue Mosman and 18 Abbott Road North Curl Curl qualify as my principal place of residence. I spend time at both addresses as my de facto wife lives at 18 Abbott Road and my dependent son is resident at 12 Central Avenue Mosman. I am advised that I am at liberty to nominate which of these addresses be exempt for land tax purposes and therefore nominate 12 Central Avenue Mosman." At the hearing and in his submissions Mr Arnold contended that clause 12 of Schedule 1A to the Land Tax Management Act 1956 ("the LT Act" or "the Act") operated in such manner that in relation to the Mosman property and the Curl Curl property (and in respect of both of which the Applicant was the or an owner) so as to allow a right of election to the Applicant to select which of the two was his PPR and in the absence of an election (and there was in fact no election prior to that set out in the letter dated 25 February 2011 quoted above) that clause defaulted so that the PPR exemption was to be allowed in respect of the more valuable property and which was the Mosman property. I will revert to clause 12 of Schedule 1A in more detail later in these reasons. 5The Chief Commissioner furnished the Tribunal with lengthy and helpful written submissions and dealing with both fact and law. In respect of its content under the head of "Introduction and Background" the Tribunal includes clauses 4 to 16 (excluding footnotes which cross reference its content to either Exhibit A1 or the Statement) as follows: 4. The applicant first moved to Central Avenue Mosman in 1984. The applicant, along with his first wife, purchased 28 Central Avenue, Mosman. 5. Following the breakdown of that marriage, in 1996, the applicant purchased the Mosman property in order to be as near as possible to his young children. At or around that time 28 Central Avenue, Mosman, was signed over to the applicant's first wife as part of the separation agreement. 6. The applicant then lived at the Mosman property, with his young children staying with him 5 nights each school fortnight and half of the time during holiday periods. 7. During the 1980's the applicant's parent's moved to Australia from England. The applicant's parents decided on purchasing 18 Abbott Road, North Curl Curl ("the Curl Curl property") but as they could not afford that property alone the applicant supplied 1/3 of the purchase price of the Curl Curl property and became a 1/3 owner. 8. Following the death of the applicant's father in 1999, the applicant's mother returned to England. The applicant purchased the remaining 2/3 share of the Curl Curl property from his mother in aid of that move. The applicant rented the Curl Curl property out and paid land tax on it when liable. 9 At some point in the 1990's the applicant purchased a further property located in Griffin Road at North Curl Curl ("Griffin Road property"). The applicant commenced paying land tax on the Curl Curl property and the Griffin Road property. 10. In March 2009, the applicant sold a half share in the Curl Curl property to his de facto/girlfriend Louise Hewitt. 11. Apparently some decision was subsequently made to renovate the Curl Curl property. Ms Hewitt took the lead role in the organising of the redevelopment of the Curl Curl property. Re-development work commenced in September 2009 and the Curl Curl house was apparently habitable in April 2010. 12. It was at this time the applicant "started to get more involved in the 'finishings' of the redeveloped property" and began to spend more time at the Curl Curl property. 13. Accordingly, between April 2010 and March 2011 the applicant estimates that he spent 80% of his time residing at Curl Curl and 20% of his time residing at Mosman. 14. Between 4 June 2003 and 26 March 2010, Ms Louise Hewitt's listed drivers licence address was the Mosman property. On 26 March 2010, Ms Hewitt changed her listed drivers licence address to the Curl Curl property. 15. Between 24 July 2008 and 2 February 2010, Ms Louise Hewitt's listed electoral roll address was the Mosman property. On 16 June 2010, Ms Hewitt changed her listed electoral roll address to the Curl Curl property. 16. Throughout the relevant period the applicant's mailing address was the Mosman property. Part B. The evidence of the Applicant 6The Applicant gave oral evidence and was cross-examined. He commenced by confirming the content of Exhibit A1 and said that it did not require any amendment. 7In the interests of balance I include the content of Exhibit A1 but excluding its concluding content as to documents listed in the third page and which in accordance with that witness statement were sent to the Respondent) as follows: I am Michael Fenton (58 years old) of 12 Central Avenue, Mosman. I make this affadavit to support my statement to the NSW Office of State Revenue that I have not changed my 'primary place of residence' from 12 Central Avenue at any time during the 2010 land tax year. Early this year (2011) I received a land tax invoice for $24,857.15. I expected my land tax to be less than half of this amount. I was surprised to see that my primary place of residence had been changed to 18 Abbott Road, North Curl Curl without discussion or notification. I partly own this property and I pay land tax on this property. I first moved into to Central Avenue, Mosman, in 1984. I purchased 28 Central Avenue, and moved in there with my first wife. We had two boys there and generally enjoyed life. However, our marriage didn't last the course and we separated amicably in 1996. As this was happening I noticed that eight doors up the street 12 Central Avenue was for sale. I wanted to be as good a father as I could be to my boys and I took out loans and bought 12 Central Avenue. My first house was signed over to my wife in our separation agreement. My sons then lived in both houses as much as this is possible. Generally the boys stayed five nights out of each school fortnight at 12 Central and then half of their time during holidays. Fifteen years on we all agree that things worked out well for everybody. My oldest son is twenty-three and he still lives with me, now one hundred percent of his time at 12 Central Avenue, Mosman. He is working in a pub as he continues his studies. Also in the eighties my parents retired and moved out to Australia to be near myself and their grandsons. They selected 18 Abbott Road, North Curl Curl and, because they couldn't afford it alone, I pitched in one third of the cost and became a one third owner of the property. My boys, my parents and I had good times at Curl Curl throughout the nineties. My father died in 1999. My mother then went through a very unhappy period and she eventually decided to return to her hometown in England. To make her relocation as easy as possible I purchased 18 Abbott Road from my mother who then purchased her house in Yorkshire. I subsequently rented out North Curl Curl and paid landtax on this property when liable. In the nineties I also bought an investment property at Griffin Road, North Curl Curl. I was self employed and these properties were to be my superannuation. When I bought Abbott Road from my mother and it was added to Griffin Road, I was over the 'threshold' and I started paying landtax. In March 2009, I sold half of 18 Abbott Road North Curl Curl to my girlfriend, Louise Hewitt. Louise took the lead in the re-development of the property and selected builders and plans. Work commenced in Sept 2009 and the house was habitable by April 2010. Louise moved in to Abbott Road and it became her principal place of residence. At this time I started to get more involved in the 'finishings' of the redeveloped property and I began to spend more of my time at North Curl Curl with Louise. I own half of the house at Abbott Road, North Curl Curl and stay some of the time there with Louise and I own 12 Central Avenue one hundred percent and I live some of the time there with my son, Joseph. By March 2011, North Curl Curl was largely finished and, with my son Joseph, I embarked on the renovation of Mosman. Between April 2010 and March 2011, I estimate that I spent my time 80-20 Curl Curl to Mosman (for renovation purposes) and since March 2011, I spend my time 90-10 Mosman to Curl Curl. At no time have I ever changed my principal place of residence from 12 Central Avenue where I have lived for fifteen years (twenty six years in the street). Although I do not have any fixed plans, I was of the mind that if my relationship with Louise stayed the same, then I would move in to Curl Curl with her in the next few years and keep 12 Central Avenue in the family and pass it on to my sons. These early plans are now blown out of the water if the Office of State Revenue can summarily state that I now live in Curl Curl and claim a thousand dollars extra landtax per month. Earlier this year, to support my position that I had not changed my 'principal place of residence' I sent the following documents to the OSR:- 8Exhibit A1 is in all the circumstances rather briefer than might have been expected and it does not include some aspects as to which oral evidence was given. It contains errors of fact; by way of example: (a)It was executed on 23 January 2012 and purports to have been made by the Applicant "of 12 Central Avenue Mosman". In fact the Mosman property had been sold some time previously and as to which see Exhibit R2. At the date of execution of the statement the Applicant was no longer the owner of it. (b)The description by the Applicant of the conditional nature of his relation with Louise Hewitt ("Ms Hewitt") who was and for some years past had been his de facto spouse could not have been true either at the date of execution of Exhibit A1 or for some time prior to that date. His evidence before the Tribunal indicated in the clearest possible terms that they were and had for some time been in a stable and on-going and firm relationship. 9In the course of his oral evidence and including his cross-examination the Applicant said that he and Ms Hewitt had a joint account and out of which the cost of the renovations to the Curl Curl house were paid. Ms Hewitt deposited $500000 in that account in 2009 when she acquired a half share and presumably as the purchase consideration. She then deposited a further amount of $500000. The cost of the renovations was approximately $700000 and so that (he said) in rough terms the cost was borne as to one half each. The Applicant said that Ms Hewitt had been resident in the Curl Curl property since renovations were completed in April 2010. 10The Applicant confirmed that during the period April 2010 to March 2011 he was as to 80% of his time in the Curl Curl property and 20% in the Mosman property. (That period is referred to henceforth in these reasons as "the critical period"). 11From and after March 2011 the Applicant spent much more time in the Mosman property and more particularly in order to paint and to carry out other needed repairs. (That period ended presumably when the Mosman property was sold and occupation had to be given to the purchasers). The Applicant said that he thought that the Mosman property should be brought up to a proper standard. He made mention in this context of the land tax cost of $1000 per month and in terms which plainly indicated that it was a considerable burden. 12The Applicant's evidence was that after he received the land tax assessment for the relevant year he objected on the basis that the Mosman property was his PPR and in accordance with an election to that effect. He agreed that the higher value of the Mosman property was a relevant consideration. 13The Applicant said that although his witness statement was executed in January 2012 he thought that he had commenced it in November 2011. 14The Applicant said that he contracted to sell the Mosman property in October 2011 having first put it in the hand of estate agents in August 2011. 15It was put to the Applicant that he moved to the Curl Curl property in April 2010 in order to be with Ms Hewitt. He replied that "it may have seemed to be so but I moved back to Mosman in order to fix it up. I did not do so necessarily in order to sell it. A sale was possible but I also intended to convert it into two separate flats for the boys." 16The Applicant in his oral evidence spoke of his sons Joseph now aged 24 and Mark now aged 21. Joseph lived in the Mosman property prior to its sale while Mark lives in rented accommodation in Sydney. While it seems clear that the Applicant is and has been a devoted father the conversion of the Mosman house into two flats one for each of them on the balance of probabilities was not feasible. It might have constituted an idea or a hope but it does not appear to have amounted to more than that; there was no evidence by either of the sons as to any discussion of such a possibility. That this is so is borne out to some extent by the evidence as to the fact that the land tax on the Mosman property (described by him as $1000 per month and as a considerable burden) must give rise to the view that from and after the date on which he received a land tax assessment for the Mosman property early in 2011 its sale became likely and perhaps inevitable. The Applicant said in evidence that he lost on the Mosman property although the nature and extent of his loss was not quantified or explained. It is likely that he hoped to obtain a higher price than was in fact obtained. 17The Applicant said in his evidence that on the last day of December 2011 he was resident in the Curl Curl property. It will be noted that in accordance with clause 6 of the Statement and during the critical period the Applicant spent 80% of his time in the Curl Curl property. As to how this percentage was arrived at was not explained. There was no evidence by either of his sons or by Ms Hewitt. Moreover there was no evidence by him as to the maintenance of clothes or other possessions in the Mosman property. The probabilities favour the conclusion that during the critical period his PPR was the Curl Curl property and that the Mosman property was not. The Curl Curl property was where he lived with his de facto spouse in a stable relationship and in a house which had been extensively renovated. It is likely on the probabilities that the Mosman property was where his son lived and whom he visited thus resulting in the 80/20 ratio to which I have referred. The ratio was reversed as from March 2011 in all probability because of the need to paint and otherwise effect necessary repairs to the Mosman house and in order to facilitate its sale. As I have noted, the probabilities strongly favour the view that the Curl Curl property was his PPR. As noted previously in these reasons there was no serious or for that matter any effort to establish that the Mosman property was in fact his PPR and that Curl Curl was not. There was never any suggestion of any kind that the relationship with Ms Hewitt was in any way otherwise than stable. Putting at its best for the Applicant he has not discharged the onus on him in respect of his allegation that the Mosman property was his PPR in respect of the relevant year. 18As I have noted previously in these reasons Mr, Arnold did not in closing submissions and in so many words seek to contend that the Mosman property was the Applicant's PPR in respect of the relevant year. Mr Arnold in closing submissions relied, as I have noted, on clause 12 of Schedule 1A to the Act. His argument was that where a person owns two parcels of property he is entitled to an election as to which was his PPR and in the absence of a formal election there is an automatic default to the more valuable property. 19The fact that neither of the sons nor Ms Hewitt gave evidence must give rise to an inference that their evidence would not have assisted the Applicant. 20As I have indicated the relationship between the Applicant and Ms Hewitt is stable, having endured for some years. Each of the Applicant and Ms Hewitt is retired and there is no basis upon which in accordance with the evidence before the Tribunal they would want to be apart from each other. The fact that the Applicant spent considerable time at the Mosman property post March 2011 is explicable on the basis that repairs were needed in order to sell it; however the period post March 2011 is at most of marginal relevance. 21It is of course necessary to focus on the critical period because it is the period which relates to the relevant year. On 31 December 2010 the Applicant was resident in the Curl Curl property and having regard to the Statement had spent 80% of the preceding 6 months in that property. I refer in this context to Part C below. Part C. The Mosman property in respect of the relevant year. 22Clause 2(2) of schedule 1A to the Act provided as follows: 2) Land is not used and occupied as the principal place of residence of a person unless: (a)the land, and no other land, has been continuously used and occupied by the person for residential purposes and for no other purposes since 1 July in the year preceding the tax year in which land tax is levied, or (b)in any other case, the Chief Commissioner is satisfied that the land is used and occupied by the person as the person's principal place of residence. 23As set out previously and in dealing with the critical period the Applicant cannot satisfy the requirements of clause 2(2) (a) of the Schedule. His evidence and the Statement indicated that during the period to which subclause (2) (a) applies the Mosman property was not continuously used and occupied by the Applicant for residential purposes. Again as set out previously the Applicant said that he was resident in the Curl Curl property on 31 December 2010. 24Mr Arnold did not at any time suggest that this is a case in which subclause (b) might be available to assist the Applicant. If such an argument had been made it would fail. The Tribunal refers in this context and with approval to clauses 54 and 55 of the Respondent's written submissions in which he dealt with Chief Commissioner of State Revenue v Aldridge & Anor (RD) (2003) NSWADTAP 50 in the following terms: 54 As outlined in Chief Commissioner of State Revenue v Aldridge & Anor (RD) [2003] NSWADTAP 50 ("Aldridge") when determining whether the Mosman property was the applicant's PPR for the 2011 land tax year, attention is drawn specifically to certain relevant periods and dates in aid of answering that question. In that regard, clause 2(2) of Schedule 1A, which mirrors s3(3) of the Act as it stood at the time Aldridge was determined, provides for further criteria which must be met for a property to constitute a person's PPR. As outlined in Aldridge: '[12] Given the scheme of the Act aforementioned, it is implicit in Section (3) (3) (b) that the time at which the Chief Commissioner must be satisfied that the land is used and occupied by the owner as the owner's principal place of residence must be as at midnight on the thirty-first day of December immediately preceding the year for which the land tax is levied. Accordingly, for land to be exempt from taxation under Section 10(1) (r) of the Act, among other things: (i)(to satisfy the principal place of residence definition in Section 3(1)) that land must be the one place of residence that is, among the one or more places of residence of owner within and outside Australia, the principal place of the owner (as midnight on the thirty-first day of December immediately preceding the year for which the land tax is levied) AND (ii)(to satisfy Section 3(3)) (a) that land and no other land or flat must, since before the first day of July that last preceded the commencement of that year, have been continuously used and occupied by the owner for residential purposes and for no other purpose OR (b) in any other case, the Chief Commissioner must be satisfied that the land is used and occupied by the owner as the owner's principal place of residence (as midnight on the thirty-first day of December immediately preceding the year for which the land tax is levied); AND (iii)(to satisfy Section 10(1)(r)) that land must be used and occupied (as at midnight on the thirty-first day of December immediately preceding the year for which the land tax is levied) as the principal place of residence of the owner and for no other purpose except as provided in Section 10. [13] If any one of the conditions referred to above is not satisfied, Section 10(1) (r) of the Act will not apply. [14] Section 10(1) (r) requires that the property "is used and occupied as the principal place of residence of the owner". A subjective intention to occupy is not alone sufficient to bring a property within Section 10(1) (r). In Zachariah v Chief Commissioner Office of State Revenue [2003] NSWADT 26, a case involving a requirement of occupation of property under the First Home Owners Grant Act 2000, Ms Needham, Judicial Member, held at paragraph 14 as follows: '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.'" 55 Of the discretion in clause 2(2) (b), which at that time was reflected in s3 (3) (b), the Appeal Panel in Aldridge said: "[26] We agree with the Appellant that the Tribunal at first instance erred at law in holding that the Chief Commissioner had a discretion to treat the Respondents' Croydon property as the Respondents' principal place of residence and in purporting to exercise that discretion in favour of the Respondents. Section 3(3) (b) of the Act [whose terms are now found in clause 3(3) (b) of Schedule 1A] does not confer a true discretion on the Chief Commissioner. If the evidence of the factual circumstances supports that a particular parcel of land or a flat is used and occupied by a person as the person's principal place of residence (as defined in Section 3(1) of the Act) as at midnight on 31 December in a particular year, the Chief Commissioner must be "satisfied" of that fact. If the factual circumstances do not support that a particular parcel of land or a flat is used and occupied by a person as the person's principal place of residence as at midnight on 31 December in a particular year, the Chief Commissioner cannot be "satisfied" of that fact.'" 25The Chief Commissioner in his submissions dealt in comprehensive fashion with the statute and case law. The Tribunal does not consider it necessary to deal in detail with all of it is content; it is sufficient to refer in brief terms to some of it. 26Under the Act, a person can only have one PPR anywhere: I refer to the definition of PPR in section 3(1) of the Act; I refer also to Chief Commissioner of State Revenue v Mesiti [2003] NSWADTAP 57 especially at para. [37.]; see also Chief Commissioner of State Revenue v Paspaley [2008] NSWCA 184 at Para. [19]. the Tribunal refers also to Aronstan v Chief Commissioner of State Revenue [2008] NSWADT 8 at paras. [36]-[37] where Judicial Member Verick stated: "36 And also subject to one exception, the principal place of residence exemption is only available in respect of one residence. The legislative provisions restrict the "principal place of residence" exemption to one residence, except when a person is buying a new principal place of residence and selling his or her former residence that has been used as a principal place of residence. This concession is provided under clause 7 and recognised in subclause 12(10)... 37 The principal place of residence exemption under Schedule 1A of the LTM Act must be read in conjunction with the definition of the expression "principal place of residence of a person" found in s 3(1) of the LTM Act. The expression "principal place of residence of a person" is defined to mean "the one place of residence that is, among the one or more places of residence of the person within and outside Australia, the principal place of residence of the person" (my emphasis). 27The phrase "principal place of residence" contemplates that a person may have more than one residence. However, where a person has more than one place of residence, the exemption will apply only to the one residence, which is their principal place of residence: the Tribunal refers to McNally & Anor v Commissioner of State Revenue [2003] NSWSC 1118 para. [43]; see also Mesiti, esp. at para. [37]. 28The question of whether the Mosman property was in fact the Applicant's PPR for the 2011 land tax year or whether the Curl Curl property was his PPR, is a question of fact and degree to be determined on an objective view of the evidence before the Tribunal: see Downie v Chief Commissioner of State Revenue [2003] NSWADT 233 at paragraph [26]; see also Tobin v Chief Commissioner of State Revenue [2009] NSWADT 188 ("Tobin") at para. [47]; see also Cameron v Chief Commissioner of State Revenue [2009] NSWADT 64 especially at para. [46] in which Judicial Member Verick held: "In ascertaining whether a particular residence of a person is the principal place of residence of that person it is necessary to use an objective test and the conclusion is determined by considering the extent and quality of use and occupation of a residence in each case. The test requires that only one residence can be regarded as the principal place of residence of a person. In Deane v Commissioner of Stamp Duties (Qld) (No 2) [1996] 2 Qd R 557 Fryberg J in considering the meaning of "principal place of residence' in the context of the Stamps Act 1894 (Qld) held that the issue should be determined on an objective basis and proceeded to make the following relevant comments: 'It also seems to me that the word "principal" in the definition allows a wide range of factors to be taken into account, and also implies an objective test of what is the principal place of residence..." 29The meaning of the expression "principal place of residence" in the context of the exemption under the Act was also addressed by the Tribunal in Chief Commissioner of State Revenue v Mesiti [2003] NSWADTAP 57 especially at para. [37.]; see also Chief Commissioner of State Revenue v Paspaley [2008] NSWCA 184 at para. [19 and Aronstan v Chief Commissioner of State Revenue [2008] NSWADT 8 at paras. [36]- [37] and para. [41]. Part D Clause 12 of Schedule 1A 30Clause 12 of Schedule 1A to the Act reads (relevantly) as follows: Only one principal place of residence for all members of same family (1)For the purposes of the principal place of residence exemption, only one place of residence may be treated as the principal place of residence of all members of the same family. (2)If members of a family own (whether jointly or separately) more than one residence used and occupied by any of them as a principal place of residence, the Chief Commissioner is to treat the one place of residence elected as the principal place of residence of the family as the principal place of residence of all members of the family in respect of a tax year. (3)Such an election is to be made, by or on behalf of the members of the family, in writing and must be lodged with the Chief Commissioner within the period for the lodging of objections under section 89 of the Taxation Administration Act 1996 . (4)An election may be made, in respect of a tax year, by the end of the period allowed for the lodging of an objection to a notice of assessment of land tax liability (being an initial assessment of land tax liability) for that tax year. (5)If an election is not made, the Chief Commissioner is to treat the residence that has the highest land value for land tax purposes as the principal place of residence of all members of the family. (6)For the purposes of this clause, a "family" consists of the following: (a)a person and his or her spouse (if any), (b)any dependent child or dependent step-child of the person and his or her spouse (or of either of them) who ordinarily resides with the person or his or her spouse. (7)A person is the "spouse" of another person if: (a)they are legally married, or (b)the person is the de facto partner of the other person. 31As set out previously in these reasons the Applicant contends that there is in clause 12 a right of election where two properties are owned and that that right of election can operate in default of an election so as to confer the exemption on the more valuable property. 32Clause 12(1) of Schedule 1A provides that for the purposes of the PPR exemption only one place of residence may be treated as the PPR for all members of the same "family". 33Clause 12(6)(a) of Schedule 1A defines "family" as "a person and his or her spouse". Clause 12(7) (b) provides that a person is the "spouse" of another person if they are that person's de facto partner. The Applicant and Ms Hewitt were at the relevant time "de facto" partners. It is therefore clear that the Applicant and Louise Hewitt constituted a "family" as defined. To that end, clause 12(2) provides that if members of a family own more than one residence used and occupied by any of them as a PPR, the Chief Commissioner is to treat the one place of residence elected as the PPR of the family as the PPR of all members of the family in respect of a tax year. 34It is clear that for Clause 12 to apply, Clause 12(2) requires the following two criteria: (a)members of the same family own more than one residence; and (b)more than one residence is used an occupied by the members of the same family as their respective PPRs. 35The Applicant does not meet the criteria for Clause 12. Clause 12 applies where different members of the same family each own, use and occupy separate ("more than one") residences as their respective PPRs. The Applicant and Ms Hewitt, who are members of the same family, did not use and occupy more than one residence (i.e. different residences) as their respective PPRs for the relevant year. As a de facto couple living together they occupied the Curl Curl residence as their PPR for the purposes of the relevant year. 36Document 1 of the section 58 documents is an application by Ms Hewitt dated 2 August 2010 in which she records her intention to reside in the Curl Curl property as her PPR. 37It is relevant to note that the fact that for these purposes Joseph (the Applicant's son) was not a member of the family in respect of the relevant year both because his age was in excess of the maximum permitted statutory age and because in any addition he was not a dependent child within the definition.. 38Mr Arnold in his closing submissions referred to a ruling which, he contended, could be read as favouring the Applicant on the basis that where a person has two parcels of property the more valuable property should be entitled to the exemption and (as I understood him) even where that more valuable property was not that person's PPR. Revenue Ruling LT82 provides relevantly that "Exemption is available for only one place of residence owned by members of a family. If members of the same family own and occupy more than one residence the exemption will only apply to one of the residences. If one of the residences is the family's principal residence that property is exempt and the others are liable. If two or more members of the same family have different PPRs and each property satisfied the PPR exemption tests the owners may elect to have the exemption apply to any one of the residences." It is important to note that in its terms the ruling applies only to residences which are PPRs.. The Tribunal does not accept that the ruling applies in the manner for which Mr. Arnold contends but even if it did, it could not take precedence over the provisions of the Act. Part E Conclusion 39The evidence before the Tribunal is such that it is likely on the balance of probabilities that the Mosman property was not the Applicant's PPR in respect of the relevant year and that the Curl Curl property was, in respect of the relevant year, his PPR. This being so the Applicant was not entitled in respect of the relevant year to the PPR exemption in respect of the Mosman property. Specifically in respect of clause 2(2)(a) of Schedule 1A the Applicant could not satisfy the continuous use requirement and as regards Clause 2(2)(b) of the Schedule there is no basis upon which the Chief Commissioner could be satisfied that tan exemption should be granted. 40The Applicant referred the Tribunal to a case of Ghali v Chief Commissioner of State Revenue [2011] NSWADT 261; in the view of the Tribunal this case (which is under appeal) turns on its own facts and is not relevant. 41As regards clause 12 of the Schedule the fact that the Mosman property was not the Applicant's PPR in respect of the relevant year precludes the exemption and there was no right of election or election by default on the basis for which the Applicant contends. 42This being so the decision under review must be affirmed. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 22 May 2012