Bampton v Chief Commissioner of State Revenue

[2023] NSWCATAD 267

Civil and Administrative Tribunal

New South Wales

• Amendment notes

Medium Neutral Citation:

Bampton v Chief Commissioner of State Revenue [2023] NSWCATAD 267

Hearing dates:

25 August 2023

Date of orders:

17 October 2023

Decision date:

17 October 2023

Jurisdiction:

Administrative and Equal Opportunity Division

Before:

S Dunn, Senior Member

Decision:

1. The application for an order extending time for the filing of the application for review in respect of the land tax assessments for the Property for the 2000 to 2006 land tax years is dismissed.

2. The application for review in respect of the land tax assessments for the Property for the 2000 to 2006 land tax years is dismissed.

3. Under s 41 of the Civil and Administrative Tribunal Act, the period of time for filing an application for review of the land tax assessments for the Property for the 2007 and 2008 land tax years is extended to 4 April 2023.

4. The land tax assessments in respect of the Property for the 2007 and 2008 land tax years are revoked and remitted to the Respondent to reassess on the basis that the Property is exempt as the Applicants’ principal place of residence.

Catchwords:

TAXES AND DUTIES – application for order extending time for filing application – relevant principles – principal place of residence exemption – adjoining properties – whether properties physically undivided – whether properties undivided in occupation and use

Legislation Cited:

Administrative Decisions Review Act 1997 (NSW), s58

Civil and Administrative Tribunal Act 2013 (NSW), ss 40, 41

Land Tax Management Act 1956 (NSW), ss 3, 7, 10(1)(r), Sch 1A

Taxation Administration Act 1996 (NSW), ss 96, 99

Cases Cited:

Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175

CFA v Department of Family and Community Services [2016] NSWCATAD 32

Chief Commissioner of State Revenue v Aldridge & Anor (RD) [2003] NSWADTAP 50

Chief Commissioner of State Revenue v Sacco (RD) [2008] NSWADTAP 61

Cooney v Chief Commissioner of State Revenue [2017] NSWCATAD 375

Cornish Investments Pty Limited v Chief Commissioner of State Revenue (RD) [2013] NSWADTAP 25

D W Tolson Management Pty Ltd v Chief Commissioner of State Revenue [2016] NSWCATAD 113

Daoud v Chief Commissioner of State Revenue [2015] NSWCATAD 53

Hunter Valley Developments Pty Ltd v Cohen, Minister of Home Affairs and Environment (1984) 3 FCR 344 at 348

Ryan & Anor v Commissioner of Land Tax [1982] 1 NSWLR 305

Texts Cited:

Nil

Category:

Principal judgment

Parties:

Michael Bampton and Karen Bampton (Applicants)
Chief Commissioner of State Revenue (Respondent)

Representation:

Counsel:
I Roberts SC (Applicants)

Solicitors:
Norton Rose Fulbright (Applicants)
Crown Solicitor (Respondent)

File Number(s):

2023/108280

Publication restriction:

Nil

Reasons for decision

Introduction

1. On 4 April 2023 the Applicants, Mr and Mrs Bampton, lodged an application in this Tribunal seeking a review of nine land tax assessments which had been issued to Mrs Bampton in respect of a property owned by her at Bondi (Property) for the 2000 to 2008 land tax years.

2. Mrs Bampton lodged an objection in respect of each of those assessments in 2009. By letter dated 1 July 2009 the Respondent noted that as that objection was lodged out of time it was not considered to be valid. Nevertheless, he proceeded to determine the objection and determined that the land tax assessments for the 2000 to 2008 years were correct.

3. Section 96 of the Taxation Administration Act 1996 (NSW) (TAA) provides that a taxpayer may apply to the Tribunal for a review of a decision of the Respondent that has been the subject of an objection. Section 99 of the TAA provides that an application for review must be made not later than 60 days after the date of issue of the Respondent’s determination of the objection.

4. The Applicants seek an order pursuant to s 41 of the Civil and Administrative Tribunal Act 2013 (NSW) (CAT Act) or s 99 (1) of the TAA extending the time for bringing their application for review.

5. If the Tribunal makes an order extending time for bringing the application, the Applicants seek to have the assessments set aside on the basis, they say, that the Property was exempt from land tax as it formed a parcel of land with the property next door which they used together as their principal place of residence in all relevant land tax years.

6. The Respondent opposes an order extending time for bringing the application. If an order extending time is made, the Respondent’s position is that the Applicants have not established that the Property was their principal place of residence for the 2000 to 2006 land tax years.

Preliminary Matters

7. Two preliminary matters arise.

8. First, the application for review was originally framed, and described in the Applicants’ written submissions, as an “appeal” against the Respondent’s “decision to refuse to refund” to Mrs Bampton the land tax that has been paid in respect of the 2000 to 2008 assessments. That is not a decision which the Tribunal has jurisdiction to review. It was confirmed by the Applicants’ counsel at the hearing that the application they wish to press is for a review of the land tax assessments for each of those years.

9. Secondly, the Applicants had also contended in their written submissions that they were not “taxpayers” as that term is defined in the Land Tax Management Act 1956 (NSW) (LTMA), such that the time limitations imposed by s 96 of the TAA do not apply to them. The Applicants’ counsel confirmed at the hearing that that contention, which I note was plainly wrong, was withdrawn.

Material Before the Tribunal

10. The Applicants relied at the hearing on two statements of Mr Michael Bampton dated 5 June 2023 and July 2023 respectively, an undated photograph (which the Tribunal was informed was taken on 11 August 2023) of one of the rooms in the Applicants’ house which shows a stairwell leading down to (what the Tribunal was informed was) a garage, and a Wikipedia page about “Nearmap” and a Nearmap “About Us” webpage.

11. Mr Bampton also gave evidence and was cross-examined.

12. The Respondent relied upon documents lodged pursuant to s 58 of the Administrative Decisions Review Act 1997 (NSW) (ADR Act), a Tender Bundle and the affidavit of Larissa Devlin sworn 8 August 2023.

Relevant Legislative Provisions

TAA

13. The TAA applies in respect of “taxation laws” which are defined in s 4 of the TAA to include the LTMA.

14. Section 96 of the TAA provides that a taxpayer may apply to the Tribunal for an administrative review of a decision of the Respondent that has been the subject of an objection.

15. Section 99 of the TAA provides:

99 Time for making application for review

(1) An application for review following a determination by the Chief Commissioner of an objection must be made not later than 60 days after the date of issue of the notice of the Chief Commissioner’s determination of the objection. The court or tribunal to which the application is to be made may allow a person to apply for a review after that 60-day period.

16. Section 100 of the TAA provides that an applicant’s and respondent’s cases on an application for review are not limited to the grounds of the objection.

17. Section 100(3) provides that the Applicants have the onus of proving their case in an application for review. This requires them to prove all matters necessary for the Tribunal to answer the statutory question in their favour on the balance of probabilities: Cornish Investments Pty Limited v Chief Commissioner of State Revenue (RD) [2013] NSWADTAP 25 at [28] - [31].

18. Section 101 of the TAA sets out the powers of the Tribunal in dealing with an application for review and provides that the Tribunal may, amongst other things, confirm or revoke the assessment or other decision to which the application relates, make an assessment or other decision in place of the assessment or decision to which the application relates or remit the matter to the Respondent for determination in accordance with its finding or decision.

CAT Act

19. Sections 40 and 41 of the CAT Act provide:

40 Making of applications and appeals

An application or appeal to the Tribunal is to be made in the time and manner prescribed by enabling legislation or the procedural rules.

41 Extensions of time

(1) The Tribunal may, of its own motion or on application by any person, extend the period of time for the doing of anything under any legislation in respect of which the Tribunal has jurisdiction despite anything to the contrary under that legislation.

(2) Such an application may be made even though the relevant period of time has expired.

LTMA

20. Pursuant to s 7 of the LTMA land tax is levied on the taxable value of all land in New South Wales unless it is exempt under the LTMA.

21. Land tax is charged on land owned at midnight on the thirty-first day of December immediately preceding the year for which the land tax is levied: s 8 LTMA.

22. Section 10 (1)(r) LTMA provides:

10 Land exempted from tax

(1) Except where otherwise expressly provided in this Act the following lands shall, subject to sections 10B, 10D, 10E, 10G and 10P, be exempted from taxation under this Act—

…

(r) land that is exempt from taxation under the principal place of residence exemption, as provided for by Schedule 1A.

23. Section 3 of the LTMA defines principal place of residence as follows:

principal place of residence of a person means 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.

24. The principal place of residence exemption and related concessions and restrictions are set out in Schedule 1A of the LTMA. Clause 2 of Schedule 1A of the LTMA provides, relevantly, as follows:

2 Principal place of residence exemption

(1) Land used and occupied by the owner as the principal place of residence of the owner of the land, and for no other purpose, is exempt from taxation under this Act, in respect of the year commencing 1 January 2005 or any succeeding year, if the land is—

(a) a parcel of residential land, or

(b) a strata lot or, subject to this Schedule, land comprised of 2 or more strata lots.

(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.

…

(4) The exemption conferred by this Schedule is referred to as the principal place of residence exemption.

25. Clause 3 of Schedule 1A of the LTMA defines residential land as meaning land that is used and occupied for residential purposes and for no other purpose.

Application of principal place of residence exemption to land comprised of two or more lots

26. Clause 13 of Schedule 1A of the LTMA now sets out the circumstances where the principal place of residence exemption may apply to a parcel of residential land that is comprised of two or more lots. However, cl 13 was not enacted until July 2008 and so does not apply for the 2000 to 2008 land tax years.

27. Prior to the introduction of Clause 13 of Schedule 1A, the principles set out in Ryan & Anor v Commissioner of Land Tax [1982] 1 NSWLR 305 were applied by the Supreme Court and this Tribunal in considering whether a parcel of land comprised of two or more lots may be entitled to the principal place of residence exemption.

28. In Ryan Hunt J held at p 310 that:

It follows, in my view, that contiguous blocks of land can comprise a parcel of residential land within s 10 (1)(r)(ii) only where they are undivided not only by physical separation but also in use, occupation and title.

29. This test has been referred to as the “four unities” test and was noted in Chief Commissioner of State Revenue v Sacco (RD) [2008] NSWADTAP 61 as having acquired “something of a quasi-legislative status”.

30. It requires that for two or more contiguous lots to be treated as a parcel of residential land exempt as a principal place of residence those lots must, as at the relevant taxing date, have the same owners, be physically undivided and together be used and occupied as the owners’ principal place of residence and for no other purpose.

Principles with respect to orders extending time

31. The principles relevant to extending time under s 41 of the CAT Act were set out by the Tribunal in Daoud v Chief Commissioner of State Revenue [2015] NSWCATAD 53 at [13] – [17] as follows (internal citations omitted):

13 Section 41 of the Civil and Administrative Tribunal Act 2013 (NCATA) provides that the Tribunal may by application extend the period of time for the doing of anything under any legislation in respect of which the Tribunal had jurisdiction despite anything to the contrary under that legislation. Such an application may be made even though the relevant period of time has expired.

14 Accordingly, the discretion to extend time is broad and unfettered. However, it must be exercised judicially and having regard to s 36 of the Act and the need "to facilitate the just, quick and cheap resolution of the real issue in the proceedings".

15 The grant of an extension of time is not automatic. The discretion to extend time is given for the sole purpose of enabling the Tribunal to do justice between the parties. In order to determine whether the rules will work an injustice, it is necessary to have regard to the history of the proceedings, the conduct of the parties, the nature of the litigation, and the consequences for the parties of the grant or refusal of the application for extension of time. It is also necessary to consider the prospects of the Applicants succeeding in their application. In order to justify the Tribunal extending the time, there must be some material upon which the Tribunal can exercise its discretion.

16 Time limits are set to promote the orderly and efficient conduct of proceedings in the Tribunal, to provide certainty for the parties to proceedings, and to achieve finality in litigation. For these reasons, time limits should generally be strictly enforced unless the interests of justice require that the extension be granted.

17 As set out in Jackson v Land and Housing Corporation at [22] albeit in the context of an Appeal, the relevant considerations in deciding whether to grant an extension of time include:

(1) The discretion can only be exercised in favour of an applicant upon proof that strict compliance with the rules will work an injustice upon the Applicant];

(2) The discretion is to be exercised in the light of the fact that the Respondent (to the appeal) has already obtained a decision in its favour and, once the period for appeal has expired, can be thought of as having a "vested right" to retain the benefit of that decision and, in particular, where the right of appeal has gone (because of the expiration of the appeal period) the time for appealing should not be extended unless the proposed appeal has some prospects of success;

(3) Generally, in an application for an extension of time to appeal the Appeal Panel will be required to consider:

(a) The length of the delay;

(b) The reason for the delay;

(c) The Applicant's prospects of success, that is usually whether the applicant has a fairly arguable case; and

(d) The extent of any prejudice suffered by the Respondent (to the appeal): and

(4) It may be appropriate to go further into the merits of an appeal if the explanation for the delay is less than satisfactory or if the opponent has a substantial case of prejudice and, in such a case, it may be relevant whether the Applicant seeking an extension of time can show that his or her case has more substantial merit than merely being fairly arguable.

32. To these considerations may be added: whether strict compliance with the rules will work an injustice to the Applicants and whether there are any public interest considerations in favour of the grant of an extension: CFA v Department of Family and Community Services [2016] NSWCATAD 32; Hunter Valley Developments Pty Ltd v Cohen, Minister of Home Affairs and Environment (1984) 3 FCR 344 at 348.

33. The same principles apply to extensions of time under s 99(1) of the TAA: D W Tolson Management Pty Ltd v Chief Commissioner of State Revenue [2016] NSWCATAD 113.

Background Facts

34. The following background facts are not in dispute.

35. The Applicants purchased a semi-detached house at Bondi as tenants in common in February 1994 (the Original Property).

36. Mrs Bampton purchased the semi-detached house next door, the Property, in February 1999. She is the legal owner of the Property. The Respondent now accepts that Mr Bampton is, and was at all relevant times, a beneficial owner of the Property. It was the Applicants intention to modify the Original Property and the Property (the Properties) to form one residence.

37. On 25 May 2001, the Applicants lodged a development application to Council for certain building works to be undertaken in respect of the Original Property. Development consent was granted on 20 July 2001 and a construction certificate to undertake the works was issued on 22 April 2002.

38. On 29 November 2005 an officer of the Council inspected the Properties. That officer noted that:

The existing common wall between the two semi-detached dwellings have (sic) been demolished and the brickwork at the rear proportion was being constructed.

39. On 13 December 2005 Council issued a show cause notice to the Applicants in respect of building works undertaken without approval including the demolition and reconstruction of the existing common wall between the Properties.

40. On 20 December 2005 an application to Modify Development Consent was lodged by the Applicants seeking approval for the works which had been undertaken without consent, which modification was approved on 8 February 2006.

41. On 17 February 2006 a certificate of construction compliance was issued in respect of the modifications to the Properties.

Procedural History

42. Land tax notices of assessment were issued for each of the 2000 to 2008 land tax years assessing land tax in respect of the Property and assessing nil land tax in respect of the Original Property on the basis that it was exempt under the principal place of residence exemption.

43. In 2001, 2005 and 2007 Mr Bampton (or an accountant on his behalf) queried the land tax assessments in respect of the Property with the Respondent. However, no objection was lodged until March 2009.

44. On 27 March 2009 an objection was lodged by Mrs Bampton to the land tax assessments in respect of the Property for each of the 2000 to 2008 land tax years.

45. By letter dated 1 July 2009 the Respondent wrote to the Applicants advising that the objection had not been lodged within time and was therefore considered not to be valid, but that he had considered the reasons for the objection and determined the assessments were valid. The objection decision noted that for the principal place of residence exemption to extend to a parcel of land which is comprised of two lots, the Respondent must be satisfied that the lots are undivided not only by physical separation but also by use, occupation and title. It noted that as the Original Property was owned by both Applicants and the Property was solely owned by Mrs Bampton there was no unity in title between the Properties.

46. Between 2010 and 2021 the Respondent continued to issue annual land tax assessments to the Applicants assessing the Property as liable for land tax and the Original Property as exempt. No objection was taken to the assessments for the 2010 to 2020 years.

47. On 4 March 2021 Mrs Bampton lodged an objection to the land tax assessments in respect of the Property for the 2003 to 2021 land tax years.

48. On 8 November 2021 the Respondent issued a re-assessment for the 2017 to 2021 land tax years exempting the Properties from land tax as the Applicants’ principal place of residence. The Respondent’s cover email noted that the Respondent now accepted that Mr Bampton was a beneficial owner of the Property (such that it was satisfied that there was unity of title).

42. On 26 May 2022 the Applicants lodged an objection against the Respondent’s decision not to review the land tax assessments for the years prior to 2017.

43. On 4 October 2022, the Respondent accepted the Applicants’ objection to the assessments in respect of the 2009 to 2016 land tax years out of time. The Respondent did not accept the objection in respect of the assessments for the 2000 to 2008 land tax years noting that an objection had already been made in respect of those assessments and a determination had been made to uphold them so that the Respondent was “functus officio”. That letter noted:

As such, you cannot simply make a further objection, and should seek the leave of the NSW Civil & Administrative Tribunal or the Supreme Court to commence review proceedings out of time in accordance with section 99(1) of the TAA.

51. On 5 October 2022 the Respondent allowed the Applicants’ objection in respect of the 2009 to 2016 land tax years and issued a re-assessment exempting the Properties from land tax for each of those years as the Applicants’ principal place of residence.

Mr Bampton’s evidence

52. In Mr Bampton’s first statement he said:

1. After purchase of the Property, the vendor remained in occupation until December 1999 and the Property was then rented until December 2000;

2. In about December 2000 he and his family moved into the Property;

3. At this time, the Original Property was left vacant and it was not occupied until all building works had been completed on both the Original Property and the Property;

4. Building works commenced shortly after approval was granted by the Council in April 2002. Works commenced by demolishing the rear kitchen, dining and laundry areas of the Original Property. With no kitchen or laundry facilities the Original Property was not again occupied by them until the building works to both Properties were completed;

5. The building works were staged in a manner to enable them to live in the Property for most of the time, however, whilst the internal fit out was being undertaken they were required to move into a nearby rental property;

6. The result of the building works to combine the houses is shown in a number of photographs annexed to an email dated 4 March 2021 contained within the s 58 documents.

53. In Mr Bampton’s second statement he said that he had understood that the principal place of residence exemption had been rejected by the Respondent on the basis that the Respondent did not accept there was unity of title. He said he had not understood, until receipt of the Respondent’s written submissions in these proceedings, that there was any issue concerning the use and occupation of the Properties.

54. He said that he therefore wished to “clarify” what he had said in his first statement as to the use and occupation of the Properties. He said:

1. In December 2000 his family used and occupied both the Original Property and the Property as a “single residence”. Although at that stage, prior to carrying out the renovation work the two houses were configured as separate semi-detached houses, there was access via the front and rear yard;

2. From December 2000 the family slept, cooked and mostly ate in the Property but used the Original Property as part of the house as it gave them additional living spaces which were used for different purposes and an additional bathroom;

3. In early 2001 he demolished the rear dividing fence which separated the Properties and from then on they used the rear yard as a combined rear area. Demolition of the rear fence allowed access to be gained through both Properties through their rear entrances;

4. Prior to demolition of the front access stairs in about mid 2003 access from the front of either Property to the other was obtained by stepping from one entry balcony to the entrance stairs, from those entrance stairs to the other and then onto the entrance balcony of the other Property;

5. In about late 2003, new front access stairs were constructed which provided a single access to either Property from the front boundary;

6. The building works were undertaken in the following sequence from 2002 to 2006:

1. Excavation of the rear yard, construction of the rear boundary fences and demolition of internal walls;

2. Demolition of the front access stairs, construction of the garages, garage bathroom to both Properties and construction of the internal access;

3. Rectification of internal walls in the living areas and roof area and fit out of the living areas to both Properties.

7. Building works were delayed with long periods of time with no work occurring for various reasons;

8. Whilst the works in stages (a) and (b) were undertaken, the family occupied and used the whole of both Properties as a “single dwelling” by moving through the specific rooms from time to time to suit construction activities;

9. During the construction works from 2002 to 2005 there was from time to time no front access to either Property;

10. The works in stage (c) commenced in the second quarter of 2005 and the family continued to use and occupy the whole of both Properties as a “single dwelling” by moving through the specific rooms from time to time to suit construction activities;

11. It became apparent in about the third quarter of 2005 that if they moved out to another property the works could be undertaken more efficiently. The family moved to a rental property on a short term lease until the works had reached a stage that allowed them to move back into the Properties, which they did in mid 2006;

12. Although the photographs in evidence show the current configuration, the family has used and occupied the Properties in the same way as a “single house” since December 2000, subject to making allowances for the building works as they proceeded. Although the renovations have improved the Property their use of the spaces remains generally the same.

55. In cross-examination Mr Bampton confirmed that the works referred to in stages (a) and (b) above had not been completed by the time the works in stage (c) commenced in the second quarter of 2005.

56. Mr Bampton was taken to a letter he had written to the Council in response to their show cause notice in which he had said that the works the subject of Council’s show cause notice, including the demolition of the existing common wall and construction of a new common wall, were undertaken to ensure the structural integrity of the Property and to ensure a safe workplace was maintained. He had also said in that letter that there had been the potential for collapse of internal walls including the common wall. He was asked whether the family was living in the Property while these works were being undertaken and there was the potential for walls to collapse, and he said that they were. I accept that evidence.

57. Mr Bampton was taken to an email he had written to the Respondent in 2021. In that email Mr Bampton said the Property was rented from the date of purchase until renovations commenced in 2002 and the possession of both Properties has been the exclusive possession of Mr and Mrs Bampton and their family and that has continued without change since 2002.

58. Mr Bampton explained that in preparing his statement for these proceedings which says that he and his family occupied both Properties from December 2000 (rather than 2002 as referred to in his 2021 email) he had discussions with his wife to clarify the timing of events and they together worked out, by reference to the age of their children, when certain events had occurred. This explained, he said, the differences in the dates between his email and his statement. I accept Mr Bampton’s evidence in this regard.

Consideration

Length of the delay

59. It is clear that there has been a very significant delay in seeking to bring this application for review. The time specified by the TAA for making an application is no later than 60 days after the date of issue of notice of the Respondent’s determination of an objection. That notice was issued in this case on 1 July 2009. Accordingly, the Applicants had until 29 August 2009 to make their application. They are seeking an order extending that period by more than thirteen years, to 4 April 2023.

60. The Applicants were also made aware by no later than 4 October 2022 of the need to commence proceedings in the Tribunal and to seek an order extending time, but still did not do so for a period of a further six months.

Explanation for the delay

61. The Applicants’ explanation for their delay is far from compelling.

62. First, they submit that they were not made aware by the Respondent in the 1 July 2009 letter of their right to seek a review of the assessments in the Tribunal. The Applicants say that, while Mr Bampton is a solicitor of some 36 years’ experience, having been a partner at Henry Davis York and Gadens, he had no knowledge of the land tax legislation and Mrs Bampton had no legal training.

63. However, a solicitor of Mr Bampton’s experience would undoubtedly have been able easily to seek advice, likely within his own firm, from someone familiar with the relevant statutory regime. Moreover, there was material publicly available on the Respondent’s website (the very first place one might be expected to look) under the heading “Objections and Reviews” which clearly identified a right of review to the, then, Administrative Decisions Tribunal or Supreme Court and clearly specified the 60 day time limitation for reviews.

64. In the circumstances I do not accept the Applicants’ asserted ignorance of their rights as a satisfactory explanation for the delay.

65. Further, the Applicants say that on numerous occasions they had invited the Respondent to come and inspect the Properties which they considered would have resolved the issues between them, but the Respondent chose not to inspect the Properties. They say that have been in regular communication with the Respondent to attempt to resolve the matter and had hoped to resolve the matter without having to commence proceedings.

66. However, it is clear on the evidence before the Tribunal, and Mr Bampton conceded in cross-examination, that in the almost ten year period between July 2009, when the right to apply for a review arose, and early 2019 there was no communication between the Applicants and the Respondent. During this period land tax assessments continued to be issued on an annual basis.

67. I do not accept there is any causal link between the communications the Applicants had with the Respondent prior to 2022 and the delay in commencing proceedings.

68. When the Respondent advised that Applicants on 4 October 2022 that they should seek to commence proceedings in this Tribunal, Mr Bampton did attempt to discuss the matter with the Respondent in an attempt to avoid the need to bring proceedings, but he was advised on 24 October 2022 that it would only be possible to discuss the matter with the Crown Solicitor’s Office once proceedings had actually been commenced.

69. I accept Mr Bampton’s attempts to resolve the matter outside of the Tribunal’s processes accounted for 3 weeks of the thirteen-year delay, that is for the period between 4 October 2022 and 24 October 2022.

70. The Applicants submitted that time should only be considered to commence to run from 24 October 2022 because that is the time at which it became apparent to the Applicants that they needed to file the application.

71. I reject that submission. However, in any event I note that no explanation whatsoever has been given for the delay between 24 October 2022 and 4 April 2023, over five months later, when the application was finally lodged. A delay of five months is itself significant, and certainly not “minor” as the Applicants have submitted.

72. The Applicants, despite their claims to the contrary, have clearly rested on their rights.

73. The absence of any sufficient explanation for the very significant delay in seeking to bring the application weighs heavily against the grant of leave to extend time: Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175.

Prejudice to the Respondent

74. The Applicants submitted that, because the Respondent had dealt with objections to other tax years out of time, it followed that there could be no prejudice in allowing this application to be made out of time. I reject that submission.

75. The Respondent submits that if an order was made extending the time for the filing of the application for review, he would be prejudiced because:

1. He cannot obtain aerial photos of the Properties for the period prior to 2009 as they are no longer available;

2. He cannot obtain witness statements from neighbours to test the evidence in respect of the timing of construction works and the extent of the construction works as a number of the neighbouring properties have been sold and due to the passage of time;

3. He cannot test Mr Bampton’s evidence in respect of the use of the Properties and the sequencing of the renovations in the absence of objective documentation in relation to those matters.

76. The Applicants have filed information in relation to Nearmap which is the service the Respondent uses to obtain aerial imagery. That information discloses that Nearmap imagery only first became available in Australia in 2007. As the Respondent accepts that the renovations were complete by that time, I do not accept that the Respondent has suffered any prejudice in this regard.

77. The Applicants also say that there was very little documentation relating to the construction works or photographic records of the renovations so that, again, it is not a matter of documents which once were available no longer being available due to the passage of time. However, I accept that, if an order were made extending time for filing the application, at least in respect of the 2000 to 2006 land tax years, the Respondent would suffer significant prejudice in being unable to rigorously test Mr Bampton’s evidence as to precisely what construction works were undertaken and when approximately 20 years ago in the absence of witnesses who may have been able to have been called and such documents (albeit limited) as may have been available.

Merits: The Principal Place of Residence Exemption

78. Given the above factors weigh heavily against an order extending time for the filing of the application, the Applicants must satisfy the Tribunal that their case has more substantial merit than merely being fairly arguable: Daoud at [23].

79. The Applicants submit that “nothing has changed” with respect to the Properties between 2000 and 2009 so that, as the Respondent has accepted the principal place of residence exemption applies from 2009 onwards, he should accept that it also applies for the earlier years. (In their written submissions the Applicants submitted that the Respondent did accept that the principal place of residence exemption applied for those earlier years, but that was plainly not the case).

80. However, given the significant construction works which occurred between 2002 and 2006 which resulted in the removal of significant portions of the common wall allowing ready access between the Properties, it cannot simply be accepted that “nothing has changed” with respect to the Properties or the manner in which they were used during the period 2000 to 2009.

81. The onus is on the Applicants to prove that they are entitled to the exemption.

82. The availability of the exemption is to be tested at the relevant taxing date, ie 31 December in the previous land tax year, for each relevant year: Chief Commissioner of State Revenue v Aldridge & Anor (RD) [2003] NSWADTAP 50.

83. For the Properties to be treated as a parcel of residential land exempt as a principal place of residence they must satisfy the “four unities” test, that is they must, as at the relevant taxing date:

• Have the same owners;

• Be physically undivided; and

• Together be used and occupied as the Applicants’ principal place of residence and for no other purpose.

84. For each land tax year, at the relevant taxing date, it being accepted that there was unity of title, the Applicants must, therefore, establish that the Properties were physically undivided and were, together, used and occupied as their principal place of residence.

85. As to being physically undivided, in Chief Commissioner of State Revenue v Sacco [2008] NSWADTAP 61, the Appeal Panel stated at [34] - [39]:

34 In our view, the key element of Hunt J’s formulation is the word “undivided”.

…

35 Hunt J’s criteria are all seeking, as we see it, to promote the idea of seamless occupation and use. There must be commonality of title, commonality of use, commonality of occupation and physical commonality.

…

39 …“Undivided by physical separation” must, at least, bear the connotation “significantly” or “substantially” undivided. An opening sufficient to allow a car to pass through on a long otherwise divided boundary does not in our view fit with the ordinary meaning of the phrase “undivided” by physical separation.

86. As to being used and occupied together as the principal place of residence, in Cooney v Chief Commissioner of State Revenue [2017] NSWCATAD 375 at [22] the Tribunal stated:

That is why in Ryan’s case, Hunt J spoke of lots being ‘undivided’ by reference to each of the four categories specified. … The word used – deliberately, one must suppose – was ‘undivided’. That requires a very careful enquiry and assessment. The lots must be ‘undivided’ by physical separation so that they form one physical whole. They must be ‘undivided’ in title so that they are owned as one. They must be ‘undivided’ in occupation so that they are occupied as one. And they must be ‘undivided’ in use so that they are used as one. The question is not whether there is ‘identity’ or ‘equivalence’ of use, occupation and title – is the use, occupation and title of each of them the same as the other? – But whether the lots are used, occupied and owned as one.

(emphasis added)

87. Given that the construction works were completed in 2006 and the photos in evidence (albeit taken in 2021 and 2023) show that, once those works were undertaken, large portions of the common wall between the Properties had been permanently removed allowing free movement between the Properties, the Respondent accepts, and I find on the evidence, that the Properties were, by that time physically undivided and being used and occupied by the Bampton family as one physical residence so that the principal place of residence exemption would apply for the 2007 and 2008 land tax years. In respect of the assessments for those land tax years, the Applicants have demonstrated that their case has substantial merit.

88. However, the position is different for the assessments for the 2000 to 2006 land tax years.

89. In Mr Bampton’s second statement he says that his family has occupied the whole of both Properties as a “single house” since December 2000. Mr Bampton’s second statement was described as “clarifying” his first statement. His second statement, however, contradicts his first statement in important respects, including that in his first statement he had said that after the commencement of the construction works the Original Property was not occupied again until the completion of those works. The appropriate thing for Mr Bampton to have done would have been to withdraw his first statement. Nonetheless, I generally accept Mr Bampton’s evidence in his second statement. However, I do not accept his evidence that the Properties were used as a “single house” or a “single residence”. That is the question that is before me to decide and there are numerous authorities which caution against the unqualified acceptance of self-serving statements directed towards the ultimate issue in revenue cases: Chapman v Chief Commissioner of State Revenue [2010] NSWADT 124 at [130]. As the Tribunal stated in Hashim v Chief Commissioner of State Revenue [2020] NSWCATAD 67 at [76]-[77]:

76: In those circumstances I must exercise substantial caution in accepting in any unqualified manner the statements by Mr Hashim or Ms Abbassi which assert that she made contributions to the purchase price for the Mays Hill property or which assert her ownership or equitable interest in that property. That is because such statements appear to be self-serving statements relevant directly to the issue of the validity of the Second FHOG Application and which therefore go directly to the resolution of the issue of Ms Abbassi’s ownership and also to the duty exemption issue. In Warriewood Pty Ltd v FCT 93 ATC 4653, Lockhart J observed that:

“Statements by taxpayers.. must be scrutinised with care, weighed against the objective facts and inferences to be drawn from the taxpayer’s activities generally.

77.In that matter, Justice Lockhart also relied particularly on the observations and findings of the High Court in Pascoe v Commissioner of Taxation (1956) 30 ALJ 402 at 403, per Fullagar J, that statements of the kind described above must “be considered most closely and received with the greatest caution”.

90. While I accept that there are no photographs available of the Properties or the construction works over the period, it nonetheless remains the case that there are no photographs of the Properties over the relevant period before the Tribunal. Nor have the Applicants sought to corroborate Mr Bampton’s evidence by calling any other witnesses (for example builders or neighbours) who could attest to the extent or progress of the construction works or the nature of the Applicant’s occupation or use of the Properties.

91. For the 2000 land tax year, the relevant taxing date is 31 December 1999. Mr Bampton’s evidence is that the Applicants commenced living at the Property in December 2000. Accordingly, as at 31 December 1999, the Applicants were not living at the Property and the principal place of residence exemption clearly does not apply for the 2000 land tax year.

92. Mr Bampton’s evidence is that he demolished the fence in the rear yard dividing the Properties in early 2001. While, I do not consider that is necessarily sufficient to demonstrate that the Properties were thereafter physically undivided, it is clear that on 31 December 2000 on the Applicants’ own evidence, that dividing fence remained in place, no other works had been undertaken and the Properties remained very much divided, so that the principal place of residence exemption clearly does not apply for the 2001 land tax year.

93. The Applicants’ evidence is that they left the Property in the third quarter of 2005 and rented another nearby property so as to allow the construction works to be completed, and moved back into the Property in mid-2006. Accordingly, again, the Property was clearly not being used as their principal place of residence as at 31 December 2005, so that that the principal place of residence exemption clearly does not apply for the 2006 land tax year.

94. Accordingly, it is clear that the principal place of residence exemption did not apply to the Property for the 2000, 2001 and 2006 land tax years.

95. As for the 2002 to 2005 land tax years, on the evidence, the position is simply not clear.

96. While precisely what works were undertaken and when remains unclear, it is clear that the renovation works did not commence until shortly after April 2002. Accordingly, it is clear that on 31 December 2001 on the Applicants' own evidence, while the back fence may have been demolished, the Properties otherwise remained divided by a common wall with no internal access and were accessed separately through their respective rear doors.

97. From “about late 2003” it appears the Properties could each be accessed through their respective front doors from the front and could each be accessed through their respective back doors from the rear yard (although for some periods of construction there was no front access).

98. Mr Bampton’s evidence was that the building works were carried out in stages, but there is no evidence as to precisely when particular works were done. Importantly, Mr Bampton’s evidence was that the building works described in paragraph 54 (6) (a) and (b) above which included demolition of internal walls, were not complete by the time the works referred to in paragraph (c) commenced, in the second quarter of 2005.

99. In particular, it is not clear at all from Mr Bampton’s evidence precisely when he says that the common wall between the two Properties was demolished. The notes of the Council inspector of his inspection on 29 November 2005 note that, by that time, the existing common wall between the two Properties had been demolished. However, it is not clear when that wall had been demolished. The inspector also notes that the rear proportion of that wall was, at that time, being reconstructed.

100. While I accept Mr Bampton’s evidence that the family used different rooms in each Property generally over this period, subject to making allowances for the building works as they proceeded, without the details of what allowances were required to be made at the relevant taxing dates and which parts of each Property were in fact being used, I cannot be satisfied on the evidence that at those times the family was in fact using and occupying both Properties as one.

101. In my view, while the common wall remained in place, even if the Properties were strictly “physically undivided” by reason of the removal of the fence in the rear yard, the Properties were likely not capable of “seamless occupation and use” in the sense intended by Hunt J. Certainly the Applicants have not proved on the balance of probabilities either that they were capable of seamless use and occupation or that they were in fact used and occupied as a “single residence”.

102. It follows that the Applicants have not established that their case has merit in respect of the assessments for the 2000 to 2006 land tax years.

Other considerations relevant to extension of time

103. Strict compliance with the rules, in this case, at least in so far as the application for review of the assessments for the 2000 to 2006 land tax years are concerned, would not work any injustice for the Applicants. Even if I were prepared to make an order extending the time for filing the application in respect of those assessments (which I am not), I would find that the principal place of residence exemption did not apply for the 2000, 2001 and 2006 land tax years and that the Applicants had not satisfied their onus of proof in respect of the exemption for the 2002 to 2005 land tax years.

104. Nor has it been suggested that there are any public interest considerations in favour of granting an extension for those years.

105. The position is different, however, in respect of the assessments for the 2007 and 2008 land tax years where the Applicants have demonstrated that the principal place of residence exemption does apply.

Conclusion

106. In the circumstances, I do not consider it appropriate to make an order extending the time for bringing the application for review in so far as the assessments for the 2000 to 2006 land tax years are concerned. Even if an order granting an extension of time to bring the application were made, the application would fail in respect of each of those assessments.

107. As the Tribunal noted in Daoud, time limits are set to promote the orderly and efficient conduct of proceedings in the Tribunal, to provide certainty for the parties to proceedings, and to achieve finality in litigation and should generally be strictly enforced unless the interests of justice require otherwise.

108. However, I do consider in the interests of justice, it is appropriate to make such an order in respect of the application for review of the land tax assessments for the 2007 and 2008 land tax years.

109. I will, further, make an order revoking the assessments in respect of the Property for those years and remitting the matter to the Respondent to reassess land tax in respect of the Property for those years on the basis that the principal place of residence exemption applies.

Orders

1. The application for an order extending time for the filing of the application for review in respect of the land tax assessments for the Property for the 2000 to 2006 land tax years is dismissed.

2. The application for review in respect of the land tax assessments for the Property for the 2000 to 2006 land tax years is dismissed.

3. Under s 41 of the Civil and Administrative Tribunal Act, the period of time for filing an application for review of the land tax assessments for the Property for the 2007 and 2008 land tax years is extended to 4 April 2023.

4. The land tax assessments in respect of the Property for the 2007 and 2008 land tax years are revoked and remitted to the Respondent to reassess on the basis that the Property is exempt as the Applicants’ principal place of residence.

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I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal.

Registrar

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.

Registrar

Amendments

18 October 2023 - Paragraph 91 amended in decision

Decision last updated: 18 October 2023