Theophilas v Chief Commissioner of State Revenue [2014] NSWCATAD 100

Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Theophilas v Chief Commissioner of State Revenue [2014] NSWCATAD 100 Hearing dates: 19 June 2014 Decision date: 16 July 2014 Jurisdiction: Administrative and Equal Opportunity Division Before: Professor G.D. Walker, Senior Member Decision: The decision under review is affirmed. Catchwords: Land tax - principal place of residence - entitlement to have other land taken into account Legislation Cited: Civil and Administrative Tribunal Act 2013; Land Tax Management Act 1956 Cases Cited: Aronstan v Chief Commissioner of State Revenue (CCSR) [2008] NSWADT 8; B & L Linings Pty Ltd v CCSR [2008] NSWCA 187, (2008) 74 NSWLR 481; Cornish Investments Pty Ltd v CCSR [2013] NSWADTAP 25; Deane v Commissioner of Stamp Duties (No 2) (1996) 2 Qd R 557; FCT v Dalco (1990) 168 CLR 614; Gauci v FCT (1975) 135 CLR 81; Kidston Goldmines Ltd v Commissioner of Taxation (1991) 30 FCR 77; Leda Manorshead Pty Ltd v CCSR [2010] NSWSC 887; McCormack v FCT (1979) 143 CLR 284; Nixon v FCT (1979) ATC 4377; Penrith Rugby League Club Ltd v Commissioner of Land Tax [1983] 2 NSWLR 616; Zakariya v CCSR [2003] NSWADT 26 Category: Principal judgment Parties: Spiros Theophilas (Applicant) Chief Commissioner of State Revenue (Respondent) Representation: Counsel SJ McMillan (Applicant); I Sethi (Respondent) Crown Solicitor's Office (Respondent) File Number(s): 1410029

reasons for decision

Background 1The applicant Mr Spiros Theophilas on 20 January 2014 applied to this tribunal for review of a land tax assessment notice issued on 23 September 2013 (exhibit R1, tab 2) by the Chief Commissioner of State Revenue pursuant to the Land Tax Management Act 1956 (LTM Act) and the Taxation Administration Act 1996 (TAA Act) imposing land tax as at the taxing date, midnight on 31 December 2012. The assessment was issued on the basis that the applicant was entitled to the principal place of residence (PPL) land tax exemption contained in schedule 1A of the LTM Act in respect of his principal place of residence located at 6 Rodgers Avenue, Panania, New South Wales, in the 2013 land tax year. 2The applicant lodged an objection to the assessment, arguing that residential land situated at 82 St Marks Road, Randwick, was his principal place of residence for the purposes of the 2013 tax year and thus attracted the PPR exemption for that year. By letter dated 2 December 2013 (exhibit R1, pp 26 - 27) the Chief Commissioner disallowed that objection. 3Mr Theophilas now seeks review of the basis on which the Chief Commissioner had issued the assessment, arguing that the Randwick property was his principal place of residence during the 2013 land tax year and that it should therefore attract the benefit of the PPR exemption. The only taxing date in issue in this case is thus 31 December 2012. 4The applicant acquired the Randwick property on 26 November 1992. After settlement of the conveyance he lived there from early 1993 until September 2012. He has never obtained any income from the property. From January 1986 to December 1999 he owned and operated a BP service station and convenience store in Old South Head Road, Rose Bay. During the time he owned the service station, his niece, Katherine Grigorakis, was employed full-time at the service station and lived with the applicant at Randwick, and before that in a two-bedroom apartment in Vaucluse, where the applicant lived before moving to Randwick. 5On 18 July 2011 the applicant entered into a contract with Cosmopolitan Homes Pty Ltd for the demolition of the existing Randwick residence and the construction of a new residence there. Immediately before the demolition in September 2011 he moved out of the Randwick property and went to live at the Panania property, which he owned by way of inheritance from a cousin, while the new house was under construction. 6After the demolition of the previous structure in September and October 2011, some site works were carried out, including removal of a swimming pool, the delivery of landfill and the construction of a retaining wall with a view to raising the level of the land. But on 4 November 2011, Cosmopolitan went into liquidation and construction of the new residence ceased (the applicant had originally stated that Cosmopolitan went into liquidation in November 2012, but that apparent typographical error was later corrected in his affidavit, exhibit A2). As he had obtained home warranty insurance for the project, he lodged a builder's warranty claim on the policy. The claim was accepted but it was not until May 2013 that the applicant received payment of the sum due, $197,118.85. Until receiving payment, the applicant was unable to resume construction, but following payment he obtained quotes from other builders, eventually settling on Prohora Building Group Pty Ltd. It was then necessary for the new builder to obtain a current construction certificate, as well as detailed construction and engineering drawings. The applicant expects that the rebuilding project will recommence in the near future. 7On 22 August 2013, the Chief Commissioner sent a letter to the applicant informing him of his potential land tax liabilities (exhibit R1, p 1). In that letter the respondent identified land owned by the applicant as at midnight on 31 December 2012 as being Randwick, Panania and a third property at 191 Hawkshill Road, Canyonleigh. The letter also enclosed a land tax questionnaire and a guide containing information about land tax, a list of some of the exemptions that could apply and some examples of how land tax would operate in certain situations. 8The Chief Commissioner issued the assessment on 23 September 2013, which created a land tax debt in the sum of $11,950.65. The Chief Commissioner wrote to the applicant confirming approval of his request for payment of the debt by instalments (exhibit R1, p 9). The schedule to that letter provided for the final instalment to be paid by 7 April 2014. The debt was not paid and remains outstanding.