BRAY AND COMMISSIONER FOR ACT REVENUE
[2007] ACTAAT 15
•23 July 2007
AUSTRALIAN CAPITAL TERRITORY
ADMINISTRATIVE APPEALS TRIBUNAL
CITATION:BRAY AND COMMISSIONER FOR ACT REVENUE [2007] ACTAAT 15 (23 JULY 2007)
AT07/01
Catchwords: First Home Owner Grant – criterion 3 of eligibility – applicant’s partner must not have received an earlier grant – meaning of “partner” – same sex relationship – whether relationship had ended – onus of proof – meaning of “spouse” – penalty whether dishonesty involved.
Administrative Appeals Tribunal Act 1989, ss 34, 37
First Home Owner Grant Act 2000, ss 6, 10, 23, 26, 31, 39, 47, 48
Legislation Act 2001, s 169
Commonwealth of Australia v HREOC & Muller [1998] 138 FCA (27 February 1998)
Federal Capital Press of Australia Pty Ltd & Ors and Commissioner for ACT Revenue [1995] ACTAAT 102 (1 February 1995)
Ladybird Children’s Wear Pty Ltd and Department of Business & Consumer Affairs (1976) 1 ALD 1Lynam v Director-General of Social Security (1983) 1 AAR 197
McDonald v Director-General of Social Security (1984) 1 FCR 354Minister for Health v Thompson (1985) 8 FCR 213 at 223-224
Pelka v Secretary, Department of Family & Community Services (2006) 151 FCR 546
Re Greenham and Minister for the Capital Territory (1979) 2 ALD 137
Tribunal: Mr M H Peedom, President
Date:23 July 2007
AUSTRALIAN CAPITAL TERRITORY )
ADMINISTRATIVE APPEALS TRIBUNAL ) NO: AT07/01
GENERAL DIVISION )
RE: ERIC MALCOLM
BRAY
Applicant
AND: COMMISSIONER FOR
ACT REVENUE
Respondent
CORRIGENDUM TO DECISION
Tribunal : Mr M H Peedom, President
Date : 26 July 2007
In the Reasons for Decision dated 23 July 2007 the following corrections should be made:
Page 4, paragraph 25, line 3: delete “2006” and insert “2005”;
Page 5, paragraph 27, line 1: delete “2006” and insert “2005”;
Page 6, paragraph 35, line 1: delete “2005” and insert “2006”;
Page 10, paragraph 47, line 6: delete “2005” and insert “2006”;
Page 13, paragraph 59, line 2: delete “2006” and insert “2005”; and
Page 13, paragraph 60, lines 6 & 13: delete “2006” and insert “2005”.
……………………….
President
AUSTRALIAN CAPITAL TERRITORY )
ADMINISTRATIVE APPEALS TRIBUNAL ) NO: AT07/01
GENERAL DIVISION )
RE: ERIC MALCOLM
BRAY
Applicant
AND: COMMISSIONER FOR
ACT REVENUE
Respondent
DECISION
Tribunal : Mr M H Peedom, President
Date : 23 July 2007
Decision :
The decision under review is varied as follows:
the decision to impose interest in the sum of $519.64 is varied by specifying interest calculated in accordance with section 48(3)(b) and section 48(4) of the First Home Owner Grant Act 2000 as the amount of interest which the applicant is liable to pay; and
setting aside the decision that the applicant pay a penalty in the sum of $3,500 and substituting a decision that no penalty is payable.
Otherwise, the decision under review is affirmed.
…………………………
President
AUSTRALIAN CAPITAL TERRITORY )
ADMINISTRATIVE APPEALS TRIBUNAL ) NO: AT07/01
GENERAL DIVISION )
RE: ERIC MALCOLM
BRAY
Applicant
AND: COMMISSIONER FOR
ACT REVENUE
Respondent
REASONS FOR DECISION
23 July 2007 Mr M H Peedom, President
The decision under review
This is an application to review a decision of a delegate of the respondent which required the applicant to repay a grant made to him under the First Home Owner Grant Act 2000 (“the Act”) and to pay interest on the amount of the grant and a penalty. The decision was made because the respondent concluded, after investigation, that the applicant had a partner who had also previously been paid a grant under the Act. These facts, if true, would have rendered the applicant ineligible to be paid the grant.
Background
2. Commencing in around December 2001 the applicant lived in a same sex relationship with Mr J Davey in a rented house at Weston, ACT (“the Weston house”).
3. On 7 January 2003 Mr Davey obtained a grant of $14,000 under the Act to assist him with the purchase of a residential property at Barton in the Australian Capital Territory.
4. On 16 March 2005 the applicant applied for a grant under the Act to assist him with the purchase of the Weston house. In the application form he answered “Yes” to each of the following questions in the application:
1.Will this be the first time each applicant or their spouse will receive a grant under the First Home Owner Grant Act 2000 in any State or Territory of Australia?
2.Is each applicant or their spouse a person who has never owned a residential property, either jointly, separately or with some other person before 1 July 2000, in any State or Territory of Australia?
3.Is each applicant and their spouse a person who has never owned and occupied a residential property, either jointly, separately or with some other person on or after 1 July 2000, in any State or Territory of Australia?
5. In answer to a question “Do you have a spouse?” he answered “No”. The word “spouse” is defined in explanatory material forming part of the application as:
A person is a spouse of another if they are legally married to each other, or if they are de facto spouses of each other.
6. The application was approved and the grant was paid to the applicant on 11 May 2005. At his request the grant was paid into a bank account held jointly by him with Mr Davey and the purchase of the Weston house by him was settled on 16 May 2005.
7. To be entitled to the grant the applicant was required to meet a number of eligibility criteria. Relevantly to the issues to be determined in this case, the applicant was ineligible, pursuant to eligibility criterion 3, if he or his “partner” had been a party to an earlier application under the Act and a grant was paid on the application (see section 10(1) of the Act).
8. Section 6 of the Act defines “partner” as:
(1)A person is the partner of the applicant if the person is the applicant’s domestic partner.
(2)However, the person to whom an applicant is legally married is not to be regarded as the applicant’s partner if the commissioner is satisfied that, at the time of deciding the application for a first home owner grant, the applicant—
(a)is not living with the person; and
(b)has no intention of resuming living with the person.
9. After conducting an investigation the respondent concluded that the applicant was ineligible to be paid the grant because he was, at the relevant time, the partner of Mr Davey. The delegate’s decision, made on 25 November 2005, pursuant to sections 23(1), 47 and 48(2) (set out below) of the Act, required the applicant to repay the grant of $7,000, to pay a penalty of $3,500 and interest in the sum of $519.64.
10. In a written objection to the respondent’s decision dated 23 January 2006, the applicant disputed the factual basis upon which the decision was made. He accepted that, at the date of his application for the grant and since that date, he and Mr Davey were business partners but he asserted that they had ceased to live together on a genuine domestic basis since January 2005 and was, from that date, no longer his partner.
11. By letter dated 5 January 2007 the respondent advised the applicant that he had made a decision to disallow his objection to the decisions made on 25 November 2005. The letter stated that the applicant had failed to discharge the burden imposed by section 26(2) of the Act of showing that the objection should be upheld.
12. Provision is made by section 31 of the Act for an application for review of a decision by an applicant who is dissatisfied with the decision of the respondent on an objection.
The hearing
13. At the hearing of the appeal, the applicant was represented by Mr Davey and the respondent was represented by Mr K Archer, of counsel. Evidence was given by the applicant and, on his behalf, by Mr Davey, Mr R Haswell and Ms S Davey. Evidence was given on behalf of the respondent by Mr T Cassar and Mr J Tonna. In addition to the evidence given by the witnesses and documents tendered in evidence at the hearing, the Tribunal had before it the documents lodged with the Tribunal pursuant to section 37 of the Administrative Appeals Tribunal Act 1989 (“the T documents”).
14. In his evidence, given in the absence of Mr Davey, the applicant stated that he had commenced a personal relationship with Mr Davey in 1997. He had begun a business association with Mr Davey in 2001 as co-directors and shareholders of a company (“the company”) which undertook conservation, framing, distribution and other activities associated with art works. He and Mr Davey had also operated a club in Newcastle, New South Wales. In late 2001 the company acquired a third director and shareholder, Mr A Herbst.
15. In 2004 relations between the applicant and Mr Davey, on the one hand, and Mr Herbst, on the other hand, deteriorated and Mr Herbst withdrew from the company on terms which involved a substantial financial payment to him. This had resulted in considerable financial pressure on the company and the applicant’s personal relationship with Mr Davey began to break down.
16. In around September 2004 there had been difficulties with the settlement of the purchase of the residential property which Mr Davey had contracted to purchase in Barton in 2001. There had been protracted disagreement and litigation about the standard of the building workmanship. At around the time of scheduled settlement of the purchase, Mr Davey had been overseas and had given the applicant an enduring power of attorney to enable him to complete the purchase on Mr Davey’s behalf.
17. Mr Davey had moved into the Barton property in October 2004. At that time the company was financially stressed and in danger of being placed into liquidation and personal guarantees given on behalf of the company by the applicant and Mr Davey put them at risk of bankruptcy. Mr Davey had difficulty making repayments on the mortgage of his Barton property and in December 2004 the applicant agreed that he move into a spare room in the Weston house to enable the Barton property to be rented to a tenant.
18. The applicant said that by January 2005 his relationship had become emotionally fraught and volatile. He was able to continue working with Mr Davey but not domestically. Their personal relationship came to an abrupt end in January 2005 following an argument. The applicant produced in evidence a letter dated Australia Day January 2005 which Mr Davey had written to him. Pursuant to section 34 of the Administrative Appeals Tribunal Act, the Tribunal made an order that that the publication and disclosure of the document be restricted to the respondent, its staff and its legal advisers and to any member of the Tribunal or member of the staff of the Tribunal in the course of performing his or her duties. References to the contents of the letter have been deleted from the Tribunal’s reasons for decision other than those versions made available to the representatives of the parties.
19. [This paragraph deleted pursuant to section 34 order]
20. After a period the applicant and Mr Davey agreed that the company would continue and that they would remain as directors and shareholders. They considered, after discussing the matter between themselves and with friends, that they had no other choice.
21. In February 2005 the owner of the Weston house, who had indicated his intention to sell the property, gave the applicant first option to purchase it. Mr Davey, a qualified legal practitioner albeit without a current practising certificate, had offered to assist with the conveyancing if the applicant could obtain financial assistance to buy the property. Mr Davey also offered to provide some financial assistance with a view to finalise their relationship.
22. In around May 2005 Mr Davey moved to Newcastle to look after the club business but returned to Canberra occasionally on business. In around December 2006 Mr Davey then went to Melbourne to assist his grandmother who was in ill health and the applicant moved to Newcastle.
23. In December 2006 Mr Davey’s sister, Ms Suzanne Davey, moved into the house at Weston with her two children. The applicant had agreed to her doing so if she contributed financially to the household and undertook domestic duties.
24. Towards the end of 2006 the company’s financial position improved and the working relationship between the applicant and Mr Davey was working well. In January 2007 the applicant moved back to Canberra and Mr Davey moved to Newcastle until March 2007. They then switched locations because Ms Davey was experiencing problems with her children at school.
25. The applicant said that, since January 2005, he was a single person and no longer in a de facto relationship with Mr Davey. They had not had any sexual relationship since January 2006 and continued to live separately although the applicant stayed in the Weston house when he had occasion to visit Canberra on business. They continued, however, their business relationship and continued to operate joint bank accounts for the payment of various expenses. At the time of their separation they had had discussions about a formal settlement of the arrangements between them but had decided not to proceed with that course because of the legal costs that would have been incurred.
26. In cross-examination the applicant agreed that at the time he applied for the grant he understood that he would have been ineligible for the grant if he had a partner, whether female or male, who had also been given a grant under the Act and was aware that Mr Davey had previously been given a grant under the Act. He denied, however, that at that time he was in a domestic relationship with Mr Davey.
27. He agreed that he first brought the letter dated Australia Day 2006 to attention for the purpose of the appeal at a directions hearing in the Tribunal in March 2007. He said that he had not done so previously because he considered the letter to be of an extremely personal nature and he was reluctant for it to be aired in the Tribunal.
28. He agreed that Mr Davey had contributed approximately $140,000 towards the purchase price ($382,500) of the Weston house and that the balance had been paid for by the grant and a loan obtained by the applicant. He said that Mr Davey’s contribution represented the amount paid by way of settlement of the end of their relationship. He denied that Mr Davey was the major financial contributor throughout their relationship. He said that after they established the company, there had been an equal contribution from them both and that Mr Davey had obtained the funds by refinancing the loan on his Barton property.
29. In a written statement tendered in evidence on behalf of the applicant, Mr Davey said that he ended his same sex domestic relationship with the applicant on 26 January 2005 and had not resumed that relationship. He said that he had been mainly resident at 122 Hunter Street, Newcastle until Easter 2007 and was now resident at the Weston house.
30. Mr Davey denied that he had told two of the respondent’s officers, Mr S Tonna and Mr T Cassar, when interviewed by them on 1 September 2006, that he was in a gay relationship with the applicant.
31. Mr Haswell gave evidence that he was a personal friend and business colleague of the applicant and Mr Davey. He said that he was aware that Mr Davey and the applicant commenced a relationship in approximately January 1997 and that they lived together at an address in Kingston and then at the Weston house. He was aware that throughout 2004 the relationship was experiencing difficulties. He recalled Mr Davey expressing a desire to live on his own again and was awaiting completion of the purchase of his own property which had been delayed by a dispute with the seller. Mr Davey had engaged him to fit out the property with a view to him moving in as soon as possible. He assisted Mr Davey move into the property in October 2004.
32. Mr Davey had advised Mr Haswell that his relationship with the applicant had broken up on the day it occurred on Australia Day in January 2005 but he considered that they had not been in a relationship since October 2004. He had counselled Mr Davey not to liquidate his business interests and to attempt to achieve a settlement with the applicant. He was aware that Mr Davey had moved to Newcastle in May 2005 but that he often returned to Canberra to attend to business matters. He became aware that in approximately April 2007 the applicant was moving to Newcastle and that Mr Davey was returning to Canberra as his sister and children were moving there.
33. Ms S Davey gave evidence that she moved to live at the house at Weston with her two children at the end of January 2007. She said that Mr Davey had commenced a relationship with the applicant in 1997 but it had broken up in early 2001, before Mr Davey moved to Newcastle in about 2005 and when he moved into his apartment in Barton. When her children began experiencing problems at school the applicant agreed to go and run the business in Newcastle and Mr Davey moved back to the Weston house.
34. The applicant tendered in evidence a statement of Mr A Good dated 13 June 2007. Mr Good said that he managed the business operated by the applicant and Mr Davey in Newcastle. He was aware that the applicant and Mr Davey used residential facilities in the business premises when either of them was in Newcastle. Mr Davey had been living in the premises from January to March 2007 and then returned to Canberra. At around the same time the applicant returned to Newcastle.
35. Mr Cassar gave evidence on behalf of the respondent. On 1 September 2005, while he was employed by the Department of the Treasury as an authorised officer under the Act, he attended the business premises of Mr Davey and the applicant in Fyshwick with another employee of the department, Mr J Tonna, to inspect the applicant’s file in relation to the purchase of the Weston house. Mr Davey had given them the file and offered to allow them to take it away to be photocopied. During the course of a conversation with Mr Davey, the following exchange took place:
TONNA:“Mr Davey would you like to join us at the table? Mr Davey I have noticed that your name keeps appearing in the file”.
DAVEY:“Why? Mr Bray is my partner”.
TONNA:“What you do mean by partner”?
DAVEY:“I mean Eric Bray and I are in a gay relationship”.
TONNA:“OK that’s fine, but there may be a problem with that in regards to the First Home Owners Grant application form that has been lodged by Mr Bray”.
DAVEY:“Why is that?
TONNA:“Well both you and Eric are in a domestic relationship together and you have owned property”.
DAVEY:“But I live in Newcastle now, I’m only here for a few weeks and I’m going back to Newcastle next week”.
TONNA:“How long have you been living in Newcastle for”?
DAVEY:“Well, for about four or so months now”.
When advised by the inspectors that they intended to take the file, Mr Davey refused permission for them to do so but offered to fax the pages that Mr Tonna and Mr Cassar wanted. When advised by Mr Tonna that he intended to seize the file, Mr Davey had refused to give it to them and demanded that they leave. Mr Cassar said that he typed a statement recording the details of his conversation with Mr Davey immediately on his return to his office.
36. In cross-examination, Mr Cassar denied that he had misheard Mr Davey say that he and the applicant “were in a gay relationship”. He said that his account of the conversation was accurate and that he had been shocked by Mr Davey’s statement.
37. Mr Tonna is an inspector in the compliance area of the Department of the Treasury. He gave evidence that he accompanied Mr Cassar to the meeting with Mr Davey at Fyshwick on 1 September 2006 and corroborated Mr Cassar’s version of the conversation which he had with Mr Davey.
The law to be applied
38. Sections 23(1), 47 and 48(2) of the Act pursuant to which the decisions under review were made provide as follows:
23 Power to correct decision
(1)If the commissioner decides an application, and is later satisfied (independently of an objection under this Act) that the decision is incorrect, the commissioner may vary or reverse the decision.
47 Power to require repayment and impose penalty
(1)The commissioner may, by written notice, require an applicant (or former applicant) for a first home owner grant to repay an amount paid on the application if—
(a) the amount was paid in error; or
(b)the commissioner reverses the decision under which the amount was paid for any other reason.
(2)If, because of an applicant’s dishonesty, an amount is paid by way of a first home owner grant, the commissioner may, by the notice in which repayment is required or a separate notice, impose a penalty of not more than the amount the applicant is required to repay.
(3)If an applicant (or former applicant) for a first home owner grant fails to make a repayment required under this section or the conditions of the grant, the commissioner may, by written notice, impose a penalty of not more than the amount the applicant is required to repay.
(4)If an amount is paid in error on an application for a first home owner grant to a third party, the commissioner may, by written notice, require the third party to repay the amount to the commissioner.
48 Interest in relation to repayments
……….
(2)A person is liable to pay interest under this section on an amount paid to the person on an application for a first home owner grant if the amount is repayable under section 47.
39. Further explanation of the term “domestic partner” used in section 6(1) of the Act (referred to in paragraph 8 above) is provided in section 169 of the Legislation Act 2001 as follows:
169 References to domestic partner and domestic partnership
(1)In an Act or statutory instrument, a reference to a person’s domestic partner is a reference to someone who lives with the person in a domestic partnership, and includes a reference to a spouse of the person.
NoteThe Macquarie dictionary, (1997) defines spouse as ‘either member of a married pair in relation to the other; one’s husband or wife’.
(2)In an Act or statutory instrument, a domestic partnership is the relationship between 2 people, whether of a different or the same sex, living together as a couple on a genuine domestic basis.
Example of indicators to decide whether 2 people are in a domestic partnership
1 the length of their relationship
2 whether they are living together
3if they are living together—how long and under what circumstances they have lived together
4 whether there is a sexual relationship between them
5their degree of financial dependence or interdependence, and any arrangements for financial support, between or by them
6the ownership, use and acquisition of their property, including any property that they own individually
7 their degree of mutual commitment to a shared life
8 whether they mutually care for and support children
9 the performance of household duties
10 the reputation, and public aspects, of the relationship between them
NoteAn example is part of the Act, is not exhaustive and may extend, but does not limit, the meaning of the provision in which it appears (see s 126 and s 132).
40. The list of factors referred to in section 169(2) of the Legislation Act is not exhaustive but they are factors to which the Tribunal should have regard in arriving at its decision. That no one factor is determinative of the issue, however, is made clear by the decision of the Federal Court of Australia in Pelka v Secretary, Department of Family & Community Services (2006) 151 FCR 546. In that case the court held that in determining whether, for the purposes of the Social Security Act 1991 (Cth), two persons were in a “marriage-like relationship” regard must be had to the interpersonal relationship as a whole bearing in mind that consideration must be given to those factors which weigh against such a relationship as well as those which weigh in favour of it.
41. The kind of approach necessary to be taken by the Tribunal in determining whether the applicant and Mr Davey were, at the relevant times, living together as a couple on a genuine domestic basis is similar to that described by Fitzgerald J in Lynam v Director-General of Social Security (1983) 1 AAR 197 in determining whether the unemployment benefit of the appellant in that case should be cancelled by reason of the income of a woman who was “living with (the appellant) as his wife on a bona fide domestic basis although not legally married to him”. He said:
The same statutory formula was considered by Fitzgerald J in Lynam v Director-General of Social Security (1983) 1 AAR 197. He applied Lambe and said, inter alia (at 200):
Each element of a relationship draws its colour and its significance from the other elements, some of which may point in one direction and some in the other. What must be looked at is the composite picture. Any attempt to isolate individual factors and to attribute to them relative degrees of materiality or importance involves a denial of common experience and will almost inevitably be productive of error. The endless scope for differences in human attitudes and activities means that there will be an almost infinite variety of combinations of circumstances which may fall for consideration. In any particular case, it will be a question of fact and degree, a jury question, whether a relationship between two unrelated persons of the opposite sex meets the statutory test.
Reasons for decision
42. Although some reliance appears to have been placed by the delegate of the respondent in making the decision under review upon the answers given by the applicant to questions asked in the application for the grant as to whether he had a “spouse” (see paragraph 4 above), the applicant’s eligibility for the grant requires consideration to be given as to whether he had a “partner” as defined by section 6 of the Act. The applicant conceded in cross-examination that he was aware that he would have been ineligible for the grant at the time he applied for it if he was the “partner” of a person who had been given a grant under the Act. If paid to an ineligible person because of a mistaken belief that the person was, in fact, eligible, the decision to make the grant to such a person would be incorrect and the decision liable to be reversed pursuant to section 23 of the Act.
43. The general rule in resolving issues in proceedings before the Tribunal is that neither the applicant nor the respondent bears an onus of proving that the decision under review is wrong or that it is right (see Ladybird Children’s Wear Pty Ltd and Department of Business & Consumer Affairs (1976) 1 ALD 1). The general rule does not apply, however, in cases where the legislation pursuant to which the relevant decision has been made spells out the incidence of the burden of proof (see Minister for Health v Thompson (1985) 8 FCR 213 at 223-224 and Federal Capital Press of Australia Pty Ltd & Ors and Commissioner for ACT Revenue [1995] ACTAAT 102 (1 February 1995)). In those cases where the relevant legislation places a requirement or onus on one or other of the parties to establish a particular matter the same requirement or onus applies before the Tribunal (see McDonald v Director-General of Social Security (1984) 1 FCR 354).
44. In the circumstances of this particular case section 26(2) of the Act imposes a burden on the applicant of showing that the objection which was disallowed by the decision under review, should be upheld. In arriving at its decision the Tribunal is not bound by the facts that were before the delegate of the respondent. It is required to take into account all of the relevant facts established by the evidence placed before it by the parties (Re Greenham and Minister for the Capital Territory (1979) 2 ALD 137).
45. In order to discharge the onus on him the applicant relied primarily upon his own evidence and the evidence given by Mr Davey, that although they lived together in a same sex relationship for a period of time commencing in 1997, that relationship ended on 26 January 2005, prior to the date of his application for the grant and the payment of it. Mr Davey contended on his behalf that thereafter their relationship changed and became one properly categorised as a business relationship which lacked some of the usual features associated with persons living in a domestic relationship. He relied on their explanation that their agreement that Mr Davey continue to live in the Weston house after 26 January 2005 was made because their company was suffering financial stress and that, if it failed, they would be liable by personal guarantees given to secure a loan given to the company. The company would be unable to repay the debt if it did not continue to trade profitably. Mr Davey’s return to the Weston house was an attempt to reduce their personal financial liability. He relied upon the evidence given by them both that, since May 2005, they have lived separately in different cities for significant periods.
46. In his submissions on behalf of the respondent Mr Archer referred to a number of matters which he contended justified a conclusion that the evidence relied upon by the applicant should not be accepted. Those matters and my views in relation to them are as follows.
47. There is a clear conflict in the versions of the conversation on 1 September 2006 between Mr Davey, on the one hand, and Mr Tonna and Mr Cassar, on the other hand. The version given by Mr Tonna and Mr Cassar is referred to in paragraph 35 above. Mr Davey did not give an account of the conversation in his evidence given on affirmation before the Tribunal. He relied upon the following account given by him of the conversation in a letter dated 12 September 2005 sent by him to the respondent in support of the applicant’s objection:
Mr Tonna said “What is the nature of your relationship with Mr Bray”.
I said: “We are business partners”
Mr Tonna said: “What do you mean by partner”
I said:“What is this all about? I thought you were here to inspect a conveyancing file, not make inquiries into my personal life.”
“Is this because Eric Bray and I were in a gay relationship”
He adopted the equivocal position in his cross-examination of Mr Tonna of putting to him both that he could have been lying to Mr Tonna when explaining the status of his relationship with the applicant and that Mr Tonna may have misheard his answers. He sought to cast doubt on the reliability of Mr Tonna’s evidence in cross-examination because of Mr Tonna’s lack of experience in investigating cases involving gay relationships.
48. Such lack of experience as Mr Tonna may have had in dealing with other matters involving gay relationships is, in my view, of little significance. I have no reason to doubt the evidence of Mr Tonna and Mr Cassar that they were taken aback by the statement they allege was made to them by Mr Davey, that they appreciated the importance of accurately recording it and they did so very shortly after the conversation took place and whilst it remained fresh in their minds. I consider that the evidence given by Mr Cassar and Mr Tonna in relation to this issue should be preferred to the version given by Mr Davey in the statement provided by him to the respondent.
49. By itself, an acknowledgement of the existence of a “gay relationship” may not be sufficient to establish the existence of a domestic relationship between the persons involved. The use of that expression in the circumstances of this case, however, was in the context of Mr Davey explaining his reference to the applicant as his “partner”. The evidence which I have accepted shows that, insofar as Mr Davey was concerned, the nature of the relationship between him and the applicant went beyond the restricted nature of the relationship which he contends is established by the evidence. It supports a finding that the nature of the relationship which they acknowledge had existed prior to 26 January 2005 continued until at least 1 September 2006.
50. Mr Cassar’s and Mr Tonna’s version of the conversation on 1 September 2006 also records that, having been given the explanation by Mr Davey of the status of his relationship with the applicant, they drew his attention to the fact that there may be problems with the applicant’s application for the grant. Mr Davey then withdrew the offer he had made at the outset of the conversation for them to take the applicant’s file in relation to the conveyance of the Weston house and when advised that the file was to be seized, he refused permission for it to be taken and warned that the inspectors would have a fight on their hands. He did not give an alternative version of this part of the conversation.
51. Mr Davey explained the change in his attitude from co-operation with the inspectors to one of determined resistance to their request for access to the applicant’s conveyancing file as due to what he regarded as an unwarranted intrusion into his personal affairs. In view of the fact that the nature of his (gay) relationship was information proffered by him to the inspectors, I consider his explanation is not one that should be accepted. It is more likely, in my view, that his changed attitude was precipitated by the explanation given to him by the inspectors that there may be adverse implications for the grant to the applicant arising from that relationship.
52. Mr Archer also drew attention to written answers given by the applicant to questions asked of him by the inspectors during their investigation as support for his contention that his evidence should not be regarded as reliable. In response to a question requesting information as to the length of time the applicant and Mr Davey had resided together at the Weston house and another address, he said that the questions were improper and contravened Commonwealth sex discrimination and human rights legislation. He said, in answer to another question, that he was unable to confirm Mr Davey’s current residential address.
53. Mr Davey relied upon the absence of any prosecution of the applicant in relation to his responses to the inspectors’ enquiries to refute their suggestion that they had been obstructed in undertaking their investigation. The question as to whether their conduct involved the commission of an offence against section 39(3) of the Act is not one that is required to be answered by the Tribunal. The information sought by the inspectors’ questions was clearly relevant to their investigation and within the applicant’s capacity to provide. The applicant’s answers, which he said were given by him on Mr Davey’s advice, demonstrate, in my view, a lack of candour in his dealings with the inspectors which casts doubt on the reliability of his evidence.
54. The Weston house was purchased for the sum of $382,500. In a statement of facts and contentions lodged with the Tribunal by the applicant, he said that the fact that the funds for the 10% deposit had been paid into a bank account held jointly by him and Mr Davey had been wrongly relied upon by the respondent as evidence of a domestic relationship between him and Mr Davey. He complained that he had not previously been given opportunity to refute the conclusion arrived at by the respondent. The explanation which he gave about the handling of the deposit was that he did not then have a bank account in his own name and it was expedient for the money to be paid into the joint account to enable Mr Davey, who was assisting him with the conveyance, to complete the purchase and that Mr Davey had agreed that the money be held on trust for him.
55. In cross-examination of his evidence it became apparent that the opportunity taken by the applicant to explain the reasons for the payment of the deposit into a joint account fell short of providing a full and frank account of the extent of his financial dependence on Mr Davey in relation to the purchase by him of the Weston house. In answer to questions he agreed that the amount of the deposit had, in fact, been paid not by him but by Mr Davey; that Mr Davey had also contributed a specific sum of $99,698.10 towards the purchase of the Weston house; that Mr Davey may have paid some of the incidental expenses involved; and that the loan obtained by him to pay the balance of the purchase price, not funded by Mr Davey, was repaid by instalments from their joint bank account.
56. When asked to explain the basis upon which it had been agreed that this level of financial assistance had been provided to the applicant, Mr Davey said that it was regarded by him as a “fair and just settlement of their relationship”. When pressed to explain how he had determined the sums involved were “fair and just”, he explained that they represented the amount of money which the applicant needed to purchase the Weston house. His explanation is difficult to reconcile with evidence given by him that he and the applicant had contributed equally to their businesses since they commenced but prior to that time he had complained that he had accepted responsibility for payment of most of their living expenses and that the applicant’s failure to address financial issues was a cause of tension between them.
57. In addition to Mr Davey’s financial contribution and assistance with the conveyancing of the Weston house, it also emerged in the course of cross-examination of the applicant and Mr Davey that both of them at times withdrew money from their joint account to meet personal expenses.
58. The degree of financial dependence or inter-dependence between the applicant and Mr Davey is a matter made relevant for consideration by item 5 of section 169(2) of the Legislation Act. The evidence establishes that there was a high degree of financial inter-dependence between the applicant and Mr Davey which was not confined to matters affecting their joint business interests. It extended to making a substantial contribution to the purchase of the applicant’s place of residence and, at times, items of personal expenditure. The absence of any financial reckoning between the applicant and Mr Davey or record of it to explain the basis of the contribution made by Mr Davey of a significant proportion of the purchase price of the Weston house and the absence of evidence provided by the applicant of any accounting mechanism to separate personal and business expenditure is, in my view, inconsistent with the conclusion which the applicant invites the Tribunal to draw that since January 2005 his relationship persisted only on a business basis. The use of the Weston house by Mr Davey as a place of residence as and when he requires it, either exclusively or at the same time as the applicant, is also an indication of a continuing domestic relationship between them (see item 6, section 169(2) Legislation Act).
59. The applicant relied upon the evidence that they lived separately in different locations for significant periods of time and the letter dated Australia Day 2006.
60. Physical separation for a period of time for business or other reasons does not necessarily result in the ending of a domestic partnership particularly when the responsibility for them to manage their separate business interests in different locations appears to be based upon reasons of personal convenience as distinct from any reason designed to ensure the proper management of their business operations. Nor does the letter of 26 January 2006, said by Mr Davey to have been written in the heat of the moment, necessarily establish the permanent termination of a domestic partnership. Both matters are to be taken into account as part of the totality of the evidence to arrive at a conclusion in relation to the matter, and I note that on their own evidence the applicant and Mr Davey continued to live in the same house from the time the applicant applied for the grant until around the date that it was paid. Apart from the evidence already addressed, the following evidence provides a contrary indication to the continuation of their relationship after 26 January 2006 only on a business basis.
61. Both the applicant and Mr Davey continued to have the Weston house recorded as their residential address for the purposes of the Electrol Roll, car registration, vehicle leasing, drivers’ licences, most ASIC company registration records, bank accounts and telephone records. Both continued to have personal mail delivered to the Weston house. Mr Davey’s sister and her children reside at the Weston house. The applicant is referred to by Ms Davey’s children by his Christian name or as “Uncle Eric”. He provides some support for their care. Neither the applicant nor Mr Davey have re-partnered. The applicant provided little evidence of the reputation and public aspects of the relationship between them. Mr Davey expressly withdrew reliance upon the evidence of Ms Davey who said that their personal relationship had come to an end in 2001. Both Mr Davey and the applicant had given to each other enduring powers of attorney, that given by the applicant to Mr Davey on 12 April 2005, that had not been revoked. Both included powers going beyond matters related to their business activities including the power to make personal decisions without limit and to provide consent to medical treatment and to make medical donation of body parts. Both continue to live in the Weston house when they are present in Canberra.
62. The evidence before the Tribunal does not, in my opinion, establish on the balance of probabilities that the respondent’s decision to not uphold the applicant’s objection in relation to the decision that the grant should be repaid was not the correct or preferable decision. That decision should be affirmed. It follows from section 48(2) of the Act that interest calculated in accordance with section 48(3)(b) and (4) of the Act should be paid by the applicant.
63. The power to impose a penalty under section 47(2) is exercisable in cases where a grant is paid because of an applicant’s dishonesty. The specific conduct of the applicant relied upon as dishonest was the giving of the answers to the questions referred to in paragraph 4 above and the signing by him of a declaration to like effect. The material in the T documents shows that the applicant’s application for the grant was approved. It is to be inferred that the respondent’s approval was given because of the acceptance of the accuracy of the information provided in the application. If untrue there would be a basis for a finding that the grant was paid because of the applicant’s dishonesty.
64. The application did not, in specific terms, call for the provision of information by the applicant as to whether he was the partner of any person. It required the information given by him to identify whether he had a “spouse”. The word “spouse” has historically been a reference to a married woman in relation to her husband or a married man in relation to his wife (see Commonwealth of Australia v HREOC & Muller [1998] 138 FCA (27 February 1998)). The definition in the form of application extends its meaning to include persons who are not legally married. Its extended meaning is not, however, apt to include persons of the same sex living in a domestic relationship. It follows, in my view, that insofar as the answers given by the applicant were relied upon as evidence of dishonesty they were incorrectly so regarded and the basis for the imposition of a penalty does not exist.
FORM 33
PUBLICATION DETAILS
TO BE PUBLISHED
To be completed by Member's Staff
______________________________________________________________________
PART A FILE NO: AT07/01
APPLICANT: ERIC MALCOLM BRAY
RESPONDENT: COMMISSIONER FOR ACT REVENUE
PARTY JOINED: N/A
COUNSEL APPEARING: APPLICANT: N/A
RESPONDENT: MR K ARCHER
PARTY JOINED:
SOLICITORS: APPLICANT:
RESPONDENT: ACT GOVERNMENT
SOLICITOR
PARTY JOINED:
OTHER:APPLICANT: MR J DAVEY
RESPONDENT:
PARTY JOINED:
TRIBUNAL MEMBER/S: MR M H PEEDOM, PRESIDENT
DATE/S OF HEARING: 19 & 20 JUNE &
6 JULY 2007 PLACE: CANBERRA
DATE OF DECISION: 23 JULY 2007 PLACE: CANBERRA
______________________________________________________________________
PART B
RECOMMENDATION:
FULL REPORT ( ) CASE NOTE ( ) UNREPORTED DECISION (X)
COMMENT:
5
0