Chapman v Chief Commissioner of State Revenue

[2010] NSWADT 124

CITATION:	Chapman v Chief Commissioner of State Revenue [2010] NSWADT 124
DIVISION:	Revenue Division
PARTIES:	APPLICANT Ian and Lynette Chapman RESPONDENT Chief Commissioner of State Revenue
FILE NUMBER:	096093, 096104
HEARING DATES:	7 December 2009
SUBMISSIONS CLOSED:	7 December 2009
DATE OF DECISION:	26 May 2010
BEFORE:	Hirschhorn M - Judicial Member
CATCHWORDS:	Land tax – principal place of residence
LEGISLATION CITED:	Land Tax Management Act 1956 Taxation Administration Act 1996
CASES CITED:	Chief Commissioner of State Revenue (RD) v McIlroy [2009] NSWADTAP 21 CCSR v Ferrington [2004] NSWADTAP 41 Chief Commissioner of State Revenue v Mesiti [2003] NSWADTAP 57 McNally & Anor v Chief Commissioner of State Revenue [2003] NSWSC 1118 Commissioner of Land Tax v Christie [1973] 2 NSWLR 526 Chief Commissioner of State Revenue v Aldridge & Anor [2003] NSWADTAP 50
REPRESENTATION:	APPLICANTS Ian and Lynette Chapman RESPONDENT Chief Commissioner of State Revenue
ORDERS:	The Respondent’s decision to assess the Applicants for land tax for the 2002-2008 land tax years inclusive in respect of the North Avoca property is set aside and a decision substituted that Mrs Chapman was entitled to the principal place of residence exemption in respect of the North Avoca property for each of the 2002-2008 land tax years inclusive.

REASONS FOR DECISION

Part A - Introduction

1 The Applicants, Mr and Mrs Chapman, have applied for review of two decisions by the Respondent, the Chief Commissioner of State Revenue, to deny them exemption from land tax in respect of the land tax years from 2002-2008 inclusive for a property owned by them at North Avoca, NSW (“the North Avoca property”).

Part B - Facts

2 Witness statements were filed on behalf of the Applicants by Mr Chapman, Mrs Chapman, Mr Star (a retired legal practitioner who has known the Applicants for thirty years and acted for them as a personal legal adviser), Dr Husodo (a doctor who treated Mrs Chapman’s father and stepmother), Ms Ferguson (the Applicants’ eldest daughter) and Mark Chapman (the Applicants’ eldest son). Mrs Chapman was the only witness to be cross-examined by the Respondent.

3 The Applicant also relied on a bundle of photographs of the North Avoca property, a bundle of documents provided by the Applicants previously to the Crown Solicitor and a letter from a Mr Melville, a radiologist, dated 13 December 2003 relating to Mrs Chapman’s stepmother. The bundle of documents included letters in support of the Applicants from a long-term friend, a priest and friend of the Applicants, Dr Husodo, a nurse from the retirement village (Ms Armstrong) and Mrs Chapman’s brother.

4 The Tribunal notes that much of the evidence before it at the hearing of the matter was not before the Respondent at the time that it made its original decisions to issue assessments and objection decisions. The additional evidence included not only more detailed statements from the Applicants but also corroborative statements from other family members and independent witnesses.

The North Avoca property

5 The North Avoca property was jointly owned by Mr and Mrs Chapman from 6 September 1989 to December 2008 at which time the property was sold.

6 The evidence of both Mr and Mrs Chapman was that the North Avoca property was purchased by them in 1989 with the intention of it becoming the family home and that it would be their “principal place of residence”. The North Avoca property has never been rented out.

7 Mr Star, a retired solicitor, who acted for the Chapmans in relation to the purchase of the North Avoca property and has known them for in excess of 30 years made a witness statement. He said that from the date of settlement in 1989, the North Avoca property has been utilised solely by Mr and Mrs Chapman as their home. The property has never been lease or rented out during the period of ownership by Mr and Mrs Chapman.

8 Between 1989 and 2006, Mr and Mrs Chapman said that they lived at the North Avoca property and maintained it as a family home whenever they so desired.

9 Mrs Chapman said that the North Avoca property had a complete kitchen including dishwasher, various kitchen appliances, five bedrooms, two bathrooms and all the normal things found in a person’s home. It contained their clothes and personal effects including framed photographs, albums, books etc. The store room contained heaters and fans for appropriate seasons, golf clubs, surfboards, Christmas decorations, a beer fridge, wine, a ladder and household tools. Foxtel was connected to one of two televisions. Mrs Chapman said it contained “all the essentials of a home”.

10 In 1989, the Applicants submitted plans to Gosford Council for construction of a new family dwelling at the North Avoca property. The development application was rejected on 19 July 1991 ( a letter from the Council was tendered and corroborates Mr Chapman’s evidence although it is dated 19 July 1990). A revised development application was lodged on 10 December 2001 and was ultimately approved by Gosford Council on 4 March 2002 (a determination notice from the Council was also tendered by the Applicants) . The Applicants said that the construction of the new family dwelling did not proceed however due to financial reasons.

11 Mr Star, retired solicitor, confirmed the abovementioned evidence about the application and approvals from Gosford Council as he advised the Chapmans in respect of the initial rejection of their development application. He said that the proposed construction of a new residence on the North Avoca property was to better serve the Chapman’s needs and that of their growing family.

12 Mr Chapman said that their children generally lived at the North Avoca home whenever Mr and Mrs Chapman did. The twin daughters of the Applicants left school in 1993 and thereafter were at the North Avoca home whenever possible as they were both studying at university and working in Sydney or travelling overseas. The Chapman’s eldest son, attended boarding school in Sydney in 1996-1997. The Chapman’s youngest son, was at boarding school in Sydney in 1998-2000. When the Chapman sons left school, they both studied and worked in Sydney living primarily at a property in Longueville (to be discussed below) and spent as much time as they could at the North Avoca property.

13 The Chapman’s eldest daughter (Ms Ferguson) made a witness statement. She said that from the time her parents purchased the North Avoca property it was always known as their “family home”. She said that it was always her parents’ intention to renovate the home, to be there permanently and to purchase a unit in Sydney for the use of the family. She recalled discussions about the renovations and had memories of the decorations that changed in the children’s rooms as they became older.

14 The Chapman’s eldest son (Mark) also made a witness statement. He said that he remembered when his parents bought the North Avoca property and “he always knew it was our home”. He said that due to his father’s business and the children’s schooling, life was often split between the North Avoca property and the Longueville property. He said that he knew Longueville was the place they stayed whilst they were at school and when they did not have school or sporting commitments, they would return to the North Avoca property where they would be as a family. He said he boarded in his final years at school because of the commitments he had with school and his parents knew of the disruptions of being in the Longueville property. He said that the North Avoca property was “always maintained, talked about, referred to and known as our home”.

15 In respect of the time period relevant for land tax purposes and the “principal place of residence” exemption in the present case (i.e. from 1 July 2001 to 31 December 2008 inclusive), the evidence indicated that all the Chapman children had all by the start of that time period finished school and were either working, studying or travelling.

The Longueville property

16 The Applicants are the beneficiaries of a family trust (referred to in these reasons as “the CF Trust”). The trustee company of the CF Trust purchased a residential property in Longueville (“the Longueville property”) on 28 April 1983. Mr and Mrs Chapman both said that the trustee company purchased this property for investment purposes.

17 The evidence indicated that over the years from 1983 to the present, Mr and Mrs Chapman and their children had, at times, also resided at this property.

18 Mr Chapman said that the Longueville property is the registered postal office and principal place of business of the CF Trust and its trustees, companies called Ian D Chapman Pty Ltd and Chaptrust Pty Ltd, and was the registered office of some rural properties.

19 Mrs Chapman said that he and his wife have been involved in a number of businesses in Sydney and the Central Coast which included: (a) a project management consultancy and structural engineering business based in Sydney which provided services to Sydney and the Central Coast and (b) a hotel in Surry Hills. In order to attend to these businesses, Mr Chapman explained that he and his wife needed to be in close proximity to them on a daily basis. Accordingly, to facilitate business operations and avoid commuting, he explained that he and his wife spent time at the Longueville property. Mrs Chapman gave evidence to a similar effect.

20 The Applicants said (and it was not in dispute) that land tax has been paid on the Longueville property since it was purchased in 1983.

21 The Chapman’s eldest daughter (Ms Ferguson) confirmed that her parents ran several business at the Longueville property involving office meetings, meetings with business associates and clients. She said her father was a co-founder of the Josephite Community Aid, a self-funded charity set up in 1986 to help the poor and disadvantaged including refugees. She said her mother was also involved with this charity. The Longueville property was used for the charity as a place for management committee meetings, social gatherings and fundraising events, a drop-off place for Christmas hampers until 2007.

22 The Chapman’s eldest son, Mark, also confirmed that the Longueville property was used for meetings for his parent’s business and the Josephite Community aid.

Events preceding the relevant land tax years

23 The Applicants gave evidence-in-chief about certain background events that occurred prior to the relevant land tax years. Further background evidence was elicited from Mrs Chapman by the Counsel for the Respondent during cross-examination. These matters are summarised below.

24 In approximately 1996, Mrs Chapman’s father (referred to hereafter as “George’) and his wife (that is, Mrs Chapman’s step-mother, referred to hereafter as “Vicky”) moved from Queensland to live in Gosford. Mrs Chapman said that this was because George and Vicky wanted to live closer to her. George and Vicky resided with the Chapmans at the North Avoca property from about March 1996 to July 1996 until George and Vicky’s retirement villa at Kincumber was completed. Mr Chapman confirmed these matters in his statement as did Ms Ferguson and Mr Star, retired solicitor.

25 Mr Star had also acted for George in a professional capacity. Mr Star said that George had informed him that he and Vicky needed to live closer to the Chapmans as George was no longer capable of driving and that the Chapmans had agreed to take care of him and Vicky.

26 George had originally proposed to the Applicants that he and Vicky could put their money into the building proposal for the North Avoca property and live in the flat attached to the property. The Applicants both said that Mrs Chapman had suggested that the retirement village at Kincumber was only 10 minutes from the North Avoca property and, because they did not know if the building plans would be approved, it might be unsettling for George and Vicky to be moved again temporarily when construction commenced. The Applicants also thought it might be too much for the family to have George and Vicky living with them permanently.

27 Mrs Chapman said in cross-examination that George and Vicky moved into their retirement villa at Kincumber in about July 1996. Mr Star confirmed that he acted for George and Vicky in respect of the acquisition of the retirement unit and that completion occurred in mid 1996. Mr Star also said that in October 1996 he had arranged preparation of powers of attorney for George and Vicky in favour of Mr and Mrs Chapman.

28 Mrs Chapman said in cross-examination that around this time she made a commitment to look after George. At this time, her eldest son was in Sydney at boarding school and her youngest son was living at the Longueville property. Mrs Chapman said that, in light of her commitment to her father, she and Mr Chapman had to divide their time between the North Avoca property and the Longueville property. Given their youngest son was still living at home they always made sure that someone was there for him. In 1998, their youngest son went to boarding school in Sydney.

29 Mrs Chapman said that from about 1999, George could no longer drive. Since Vicky did not have a licence, Mrs Chapman drove George and Vicky wherever they wanted to go and accompanied them to medical appointments which were on a regular basis with Dr Husodo (a general practitioner in the Kincumber area who has practised for 18 years).

30 Dr Husodo gave a witness statement in the proceedings and confirmed that he had first seen George and Vicky as patients in 1996. He confirmed that he had visited George when George was living at the North Avoca property with the Chapmans in April, May and June 1996. He had then attended on George approximately once a week from July 1996 up until George’s death in 2002. The appointments took place in Dr Husodo’s surgery and also at George and Vicky’s villa. Dr Husodo confirmed that Mrs Chapman was always present at George’s consultations at the North Avoca property and often present at the later consultations (i.e. at the surgery or the retirement villa). He also said he was aware that Mrs Chapman looked after George in his final years.

31 Dr Husodo confirmed that George could not drive from about 1999 and that Mrs Chapman undertook most of the driving for him. Mr Chapman also confirmed this matter in his statement, as did Mrs Chapman’s brother and a priest/friend Father Akehurst in signed letters dated 14 August 2006.

32 Mrs Chapman explained under cross-examination that as George and Vicky lived in a retirement village that was self-contained, residents had to obtain their own food. As George was on oxygen and could not drive and neither could Vicky, Mrs Chapman took them wherever they needed to go.

33 Mrs Chapman said under cross-examination that in the late 1990’s she was in North Avoca about 4-5 days a week. She admitted that the time varied. She said that sometimes Vicky’s sister would come up and give Mrs Chapman a break.

34 Ms Ferguson said that George’s health declined around the end of 1997 and she said duties of the following kind were performed by her mother: driving George and Vicky to the shops or doing shopping for them, cooking meals for them, washing, writing letters for George, driving them to doctor’s and dental appointments, grooming for their dog, taking them out on drives or lunch and listening to music with them and caring for them generally.

35 Mr Star, retired solicitor also confirmed that he was often an invited guest to George and Vicky’s home at Kincumber and as such could verify the constant care that Mrs Chapman in particular gave to her father and step-mother including shopping trips, laundry requirements, preparation of meals and driving to medical appointments which were frequent and intense because George suffered from cancer, emphysema and heart problems.

36 The Chapman’s eldest son, Mark, recuperated from an accident in 1998 and resided during this time at the North Avoca property.

Events preceding the relevant land tax years that were the subject of cross-examination

37 In the cross-examination of Mrs Chapman at the hearing, Counsel for the Respondent also asked a number of questions regarding where the Chapman family had lived prior to the purchase of the North Avoca property in 1989 and/or the purchase of the Longueville property in 1983 by the CF Trust.

38 Mrs Chapman said that she and Mr Chapman had jointly acquired a home in West Five Dock in 1975. The property was sold just before the North Avoca property was purchased in 1989. The Chapman family lived at the West Five Dock property with Mrs Chapman’s mother whilst renovations were undertaken at the Longueville property.

39 The Chapmans subsequently moved to Longueville and the children went to school in the area. They moved most of their furniture from West Five Dock to Longueville. Mrs Chapman’s mother stayed in West Five Dock property and passed away in 1987 (the property later being sold in 1989).

40 Prior to 1989, the Chapmans had enjoyed family holidays at North Avoca and Mr and Mrs Chapman eventually decided that they would like to live there. They ended up using the money from the sale of the West Five Dock property in order to purchase the North Avoca property. They already had friends in the North Avoca area.

41 Mrs Chapman confirmed under cross-examination that Mr Chapman had started his business in about 1979. He had some premises at North Sydney and his business involved project management, structural engineering and something she referred to as “Chester”.

42 Mrs Chapman said that Mr Chapman conducted business from the Longueville property. When questioned about a plan of the Longueville property, Mrs Chapman pointed out an office, a meeting room used by Mr Chapman and also some space off the lounge room that he used from time to time for business. The rural properties were managed from the Longueville property and the company Ian D Chapman Pty Ltd – this company had various businesses, clients would come for meetings at Longueville and Mrs Chapman would do whatever work her husband needed to be done.

43 Mrs Chapman said the “Chester” business was based in North Sydney. Mr Chapman did his drawings for this business at Longueville.

44 Mrs Chapman also said during cross-examination that by 1989 (when the North Avoca property was purchased), the ages of the Chapman children were as follows: the twins were 14, her eldest son was 10 and her youngest son was 7. The twins were at high school and sons were at primary school.

45 The North Avoca property was unfurnished at the time it was purchased by the Chapmans.

46 In cross-examination, Mrs Chapman said that the North Avoca property had 5 bedrooms. The Chapmans installed a new kitchen after they acquired it. They bought a dining room table from their farm and they acquired all new beds and cane living furniture. Some other pieces of furniture came from their Longueville property (eg a chest of drawers, computer desk etc). The Chapmans also bought clothes from their Longueville property as needed.

47 In 1990, the Chapman children were still at school. Mr and Mrs Chapman and the children were in Sydney during the week and went to North Avoca on weekends (subject to their children’s sporting events). The twins left school in 1993. When the children were at school, Mrs Chapman said the family would go up to North Avoca whenever they could – it was only 1 hr and 10 minutes by car from Longueville. School holidays were spent at North Avoca. Sometimes Mrs Chapman would go up mid-week with friends.

48 In 1996-1997, Mrs Chapman confirmed that her sons were primarily at Longueville. They would spend family time at North Avoca on the weekends subject to their sporting events.

49 In 1995, Mrs Chapman confirmed that she had to make a decision about her father. He had had several heart attacks prior to 1996. Her father’s doctor in Queensland had contacted her and said her father would need to go into care as Vicky was not coping. At this time Mrs Chapman stayed with her parents. Mr Chapman remained in Sydney but would commute, sometimes staying several days in North Avoca.

50 From mid-1996, Mrs Chapman said she was mainly in North Avoca. Her youngest son was still at Longueville and attended boarding school from 1998. She and Mr Chapman made sure in 1996-1998 that one of them was always in Sydney for the youngest son.

51 In 1998-2000, Mrs Chapman said one of the twins was at Longueville, her eldest son was sometimes at Longueville and her husband was at Longueville or up at North Avoca with her.

The evidence in respect of the relevant land tax years, 2002-2008 inclusive (and the relevant period from before 1 July 2001 to 31 December 2008)

2001-2002

52 Mrs Chapman gave evidence in chief that George’s health was not good and he had a number of illnesses including cancer, emphysema, heart problems and osteo-arthritis. She said that George required constant care and in 2001 his condition deteriorated rapidly. Mr Chapman also confirmed this in his statement.

53 Mrs Chapman said her father’s ill health meant at this time that she would spend an average of 3-4 days a week, sometimes more at the North Avoca property. For the balance of the week, she would be in Sydney as Mr Chapman had business there and Mrs Chapman assisted him.

54 Mr Chapman said that George’s ill health meant that Mrs Chapman would often spend several days per week in the North Avoca property to enable her to attend to her father’s needs or take George and Vicky on outings. Mr Chapman said that on many weekends and when attending to certain project management duties at Kincumber, he would join Mrs Chapman at the North Avoca property. He acknowledged that due to George’s rapidly declining health from 2000 to March 2002, Mrs Chapman spent a lot more time at the North Avoca property than Mr Chapman. He said that sometimes the Chapman children would stay for a few nights to spend time with Mrs Chapman or to visit George.

55 By 2001, Ms Ferguson was a qualified teacher and was working at a school in Sydney. She said that her mother had dedicated herself to George’s care especially after the Chapman’s youngest son finished boarding school in 2000. Ms Ferguson also said that at this time, her mother (Mrs Chapman) was spending at least 4 to 5 days a week at the North Avoca property.

56 Mr Chapman said that during 2001 and 2002 he tried to spend as little time away from the North Avoca property on business as possible because he wanted to give help and support to his wife at this difficult time with her father.

57 Mr Chapman said that his project management consultancy, structural engineering business started a major project in June 2001 at Kincumber. This project was the refurbishment of the Sister’s of St Joseph Retreat Centre at Kincumber. The project occurred in several stages with completion occurring on 3 November 2004. Mr Chapman described it as a big project with fees in excess of $250,000.

58 Mr Chapman explained that as the main person overseeing this project, he attended regular meetings on site at Kincumber, meeting with the client, consultants, builders, engineers etc. He also made other inspections as and when required. He organised these visits to the site when he was staying at the North Avoca property for convenience. He also said that he tried to organise his other projects and business meetings in Sydney such that he could spend the latter part of the week and weekend at the North Avoca property.

59 Under cross-examination, Mrs Chapman confirmed that Mr Chapman managed the project in Kincumber from approximately June 2001 to 2004/2005. She said that Mr Chapman generally tried to organise his meetings there on a Friday or Monday so that he could also spend the weekend at the North Avoca property. She conceded that there was no regular structure as to the dates and times of his meetings.

60 The Chapman’s eldest daughter confirmed that her father had worked on the Sisters of St Joseph project at Kincumber although she said the relevant time period was from 2003-2006.

61 Mr Star, retired solicitor, confirmed that for the period from mid June 2001 to November 2004, Mr Chapman was working for the Sister’s of St Joseph retreat at Kincumber and was able, from time to time, to assist Mrs Chapman in the care of Vicky.

62 The Chapman’s eldest son, Mark, said that he was working in Sydney between 1998-2003 living on-site. He would visit the North Avoca property whenever possible to catch up with family and relax. He said at this time that his mother was spending much of her time at the North Avoca property, not only because George needed her help and support but also because his mother loved being there. Most of the time he would see George and Vicky at the North Avoca property with his mother or he would go with his mother to see them at the retirement village.

63 Mrs Chapman’s brother confirmed in a signed letter dated 14 August 2006 that Mrs Chapman attended to their father’s needs until 2002 when he passed away. He said she was able to do this because George and Vicky only lived 10 minutes from Mrs Chapman’s home in North Avoca.

64 In March 2002, George passed away. Mrs Chapman said his funeral was held near the North Avoca home at Ourimbah.

2003-2003

65 After George passed away, Mrs Chapman said that Vicky’s dementia worsened. In cross-examination, Mrs Chapman said that in 2001, George had asked Mrs Chapman to see Dr Husodo about Vicky as they had both noticed changes in her.

66 Dr Husodo confirmed in his statement that in or about 2002-2003 Vicky developed dementia and that he was Vicky’s attending doctor.

67 Mrs Chapman said that she spent a lot of time at the Kincumber retirement village with Vicky and therefore Mrs Chapman was based at North Avoca. Under cross-examination, Mrs Chapman explained that Vicky was living in the retirement village. It was not a nursing home so Mrs Chapman would take her to medical appointments and specialist consultations. A nurse would sometimes come to the retirement village to change Vicky’s dressings.

68 Mrs Chapman also said that she attended to many of Vicky’s other needs on a regular basis including organising her daily routines, meals, shopping, personal care, hairdressing, taking her out and liaising with the nurse in relation to Vicky’s health care management. Mrs Chapman said under cross-examination that in December 2002, she spent between 3,4 or 5 days at the North Avoca property per week. She said that she had promised her father, before he died, that she would look after Vicky.

69 Mr Chapman said in his statement that after George’s death, Vicky’s dementia became worse and Mrs Chapman would spend a lot of time at the Kincumber retirement village with Vicky because Vicky was not capable of doing many things without supervision. He said that his on-going project at the Sisters of St Joseph Centre Project and Vicky’s dependent nature meant that the Applicants spent more time at the North Avoca property and less time away in Sydney.

70 Dr Husodo confirmed in his statement that from the period between 2003-2007, he attended on Vicky many times and that Mrs Chapman was always present. He also said he was aware that:

(a) Mrs Chapman was Vicky’s guardian and managed most of Vicky’s daily needs primarily on her own with assistance from the nurse and staff at Broadwater Court retirement village;
(b) Vicky did not drive and that Mrs Chapman did most of the driving for her;
(c) Mrs Chapman took Vicky to specialist and other medical appointments;
(d) Mrs Chapman was appointed as principal carer of Vicky by the Central Coast Community Aged Care Services in 2006;
(e) That when the Applicants sold their North Avoca property and moved back to Sydney, in about the middle of 2007, they arranged for Vicky to move to a retirement village and to live in the dementia hostel section.

71 Ms Ferguson said that after George’s death, Mrs Chapman continued the care of Vicky. She said her mother took Vicky to appointments, organised her daily routines, her meals, organised her clothes, took her on outings and whatever was necessary. She said that even though Vicky had family in Sydney, she chose to stay in Kincumber to be close to the Applicants and that Vicky had “totally depended” on Mrs Chapman.

72 The eldest son of the Chapmans, Mark, confirmed that after George’s death, his mother and father continued to help and support Vicky until she was moved to North Sydney in 2007. Mark spent some time in 2003 from February to April at the North Avoca property before moving interstate for work.

73 Mrs Chapman’s brother confirmed in a signed letter dated 14 August 2006 that Mrs Chapman took care of Vicky and that Mrs Chapman was nominated as a power of attorney for Vicky. He acknowledged that Mrs Chapman continued to assist her husband and sons with their businesses in Sydney.

74 A priest and friend of the Chapmans, Father Akehurst confirmed that Mrs Chapman was Vicky’s principal carer. A long-term friend of the Chapmans based at Terrigal also confirmed the same. This friend was a hairdresser by occupation and could attest to Mrs Chapman’s presence in North Avoca.

75 The Applicants tendered a letter from Mr Melville, a radiologist dated 13 December 2003 to Dr Husodo relating to a CT Brain scan for Mrs Kerslake (Vicky). The letter refers under findings to “The appearances are those of generalised cerebral atrophy”. His conclusion was “Minor atrophic changes consistent with the patient’s age. Periventricular ischaemic change is noted”.

76 Under cross-examination, Mrs Chapman confirmed that in 2003, one of her daughters was living in England, another daughter was living in Sydney (sometimes at Longueville), one son was working on an island in Queensland but came back afterwards to the Longueville property. She said that if her children were working in Sydney, they would stay at Longueville but when they could, they would come up to North Avoca. Mrs Chapman said that her husband was working in Sydney at this time but would also come up to stay in North Avoca. She said because her children were all doing different things, Mr and Mrs Chapman were able to spend more time in North Avoca.

2003-2004

77 Mrs Chapman said under cross examination that a similar thing occurred in 2004. The Tribunal understood this as a reference to her evidence above regarding the place where Mr and Mrs Chapman and their children were residing in 2003.

2005

78 In 2005, Mrs Chapman said under cross-examination that Vicky started getting worse. Mrs Chapman’s presence in North Avoca was the same as it had been previously. Mr Chapman was in Sydney.

79 The Applicant’s eldest son (Mark) also made a witness statement. He said that he is a hotel licensee and has been the licensee of the family hotel at Surry Hills since August 2005.

2006

80 In 2006, Mrs Chapman said under cross-examination that one of her daughters was married in Sydney and Mrs Chapman spent a lot of time doing wedding preparation and working for her husband’s business. She would stay the night at the Longueville property when undertaking these activities. She was however still attending to Vicky’s needs. Mrs Chapman said that she would work for a few days for her husband in Sydney and would stay at Longueville and share meals with her husband and children if they were there. She said she also had friends in the Central Coast and would entertain when she was at the North Avoca property. Her friend at Terrigal confirmed this in a signed letter that was before the Tribunal.

81 Mrs Chapman said that Vicky’s condition was assessed by the relevant Area Health Services ACAT team on 23 January 2006, 31 August 2006 and 9 May 2007. Mrs Chapman arranged all those assessments and said she was present at them.

82 The Applicants also relied on a signed letter dated 18 August 2006 from Ms Armstrong, a registered nurse from the retirement village where Vicky lived. Ms Armstrong confirmed that:

(a) Vicky had advanced dementia and required constant attention and organising and greatly depends on Mrs Chapman;
(b) Mrs Chapman had agreed to be Vicky’s principal carer in a meeting with Northern Sydney and Central Coast Area Health Service, Aged Care Assessment Team;
(c) Mrs Chapman attended to many of Vicky’s needs on a regular basis: organising her daily routines, meals, shopping, personal care and taking her to Doctor’s appointments, hairdresser, outings and liaising with Ms Armstrong in relation to Vicky’s health care management.
(d) Mrs Chapman was Vicky’s advocate regarding Village management for Vicky’s retirement villa.
(e) Mrs Chapman provided “constant holistic care and support required for Victoria’s (ie Vicky’s) well-being, enabling Victoria to live at home;
(f) Ms Armstrong was aware that Mrs Chapman resides at North Avoca which enabled her to give Vicky this attention. Ms Armstrong was aware that part of Mrs Chapman’s week was spent in Sydney.

83 Mr Star, retired solicitor, said in his statement that as the retirement village where Vicky lived had no staged care facilities, the needs of Vicky were met on an almost daily basis by Mrs Chapman from her home at the North Avoca property. He said this was the case from after George died until 2007 when Vicky needed to be moved to a degree of care that neither the Kincumber retirement village more Mrs Chapman was capable of providing.

2007 onwards

84 In January 2007, Mr Chapman developed a medical condition. Mrs Chapman said that the doctor had said this condition was caused by extreme stress. To relieve this stress, the Applicants decided that the quickest option would be to sell the North Avoca property. Mr Star, retired solicitor, confirmed that he had participated in these discussions with the Chapmans. At around the same time, Vicky’s health deteriorated. Mrs Chapman said that these events caused her to re-assess matters. Following this re-assessment, the North Avoca property was put on the market by the Applicants in January 2007.

85 According to Mrs Chapman, the North Avoca property was on the market for about one and a half years. Contracts were exchanged for the sale of the property in August 2008 and the North Avoca property was finally sold in December 2008.

86 Mrs Chapman said that during the course of the sale of the North Avoca property, a section 47 land tax certificate was issued by the Office of State Revenue which stated that the land was exempt from tax.

87 In 2006-2007, Mark Chapman confirmed that he began working across the family hotel and Chaptrust businesses to assist his father who had been struck by a medical condition.

88 Mrs Chapman confirmed under cross-examination that in 2007 her time was spent between caring for Vicky and for her husband (who could not drive due to his condition).

89 After the North Avoca property was sold, Mrs Chapman said that the Applicants moved to Sydney to be closer to their businesses. They also arranged for Vicky to move down from the Central Coast to Sydney in July 2007 to be closer to the Applicants and for Mrs Chapman to attend to her needs.

90 Vicky ultimately passed away in June 2009.

Telephone, Utilities, Electoral roll and other s 58 documents

91 Mr Chapman gave evidence that all of the utilities for the North Avoca property were paid by the Applicants. However because their businesses were run from the Longueville property, most of the bills for their personal accounts were sent there. It was easier to use their business address for this purpose. Mrs Chapman said the same.

92 The Respondent filed the s 58 documents. By way of summary, these indicated the following:

1)A land tax questionnaire dated 16/12/05 completed by Mr Chapman that stated that their home address as the North Avoca property.
2)Electoral roll searches as at 29 July 2005 that showed the address of the Applicants as the Longueville property. However there were also subsequent electoral roll searches as at 29 September 2005 that showed the address of the Applicants as the North Avoca property.
3)The White pages telephone book which showed the address of the Chapmans as the Longueville property – the electronic search appears to be dated 28/11/05.
4)A FCS online search (it was unclear what this meant) that apparently showed the address of the Chapmans as the Longueville property. It was also dated 28/11/05.
5)An Office of State revenue document stating a “premises address” of the North Avoca property and a “postal address” of the Longueville property.
6)A company search for the company, Chaptrust Pty Ltd dated 10/2/06 which showed the address of Mr Chapman, as director, as the Longueville property.
7)A “Valnet” property details search from the Department of Lands apparently dated 10/2/06 which showed in respect of the North Avoca property, the owner as Mr and Mrs Chapman and “ASON (Owner)” as the Longueville property address.
8)A search from the Department of Lands in relation to the North Avoca property dated 10/2/06 which showed Mr and Mrs Chapman as joint owners of the property.
9)An RTA search dated 24/2/06 for Mrs Chapman which showed her address as the Longueville property.
10)An RTA search (undated) for Mr Chapman which showed his address as the Longueville property.
11)An email from a person (purportedly from Gosford Council) on 24/2/06 that answered a query from a person from the Office of State Revenue that asked where the address for service of bill for payment of rates for the North Avoca property was? The answer referred to the Chapmans and both the North Avoca and Longueville addresses.
12)Various information provided by the Chapmans on 25 June 2006 in response to a letter from the Office of State Revenue dated 22 May 2006.
13)Various other internal documents of the Office of State Revenue.

93 In relation to electricity bills, there were invoices for the North Avoca property from November 2004 to May 2006. The documents did not go further back as the Chapmans stated that they did not keep items of personal expenditure for longer than a 2 year period. These showed fairly regular consumption of electricity in the property for that period although the amount owing in respect of the bills was much less than the electricity bills for the Longueville property. The latter bills were in evidence for the period from October 2002 to April 2006.

94 In relation to telephone bills, there were invoices for the North Avoca property from April 2004-June 2006. These showed fairly regular use of the North Avoca telephone line however the bills were much less in total than those for the Longueville property. The latter bills were in evidence for the period from August 2002-May 2006.

95 There were no gas accounts for the North Avoca property and Mrs Chapman said they mainly used a gas bottle for cooking there. There were gas accounts in evidence for the Longueville property from October 2002-June 2006.

96 The Respondent also included in the documents, copies of income tax returns for the Applicants from 2001-2005 inclusive. These showed a residential address of the Longueville property.

97 Mrs Chapman was cross-examined by the Respondent’s Counsel in relation a number of documents contained in the Respondent’s s 58 documents. Mrs Chapman said that her income tax return was prepared by her husband and dealt with their accountant. She said that the reason why the address on the income tax return was the Longueville property was because she and her husband wanted to have everything sent to one address. This was used for convenience as they were paid through the office. She said the majority of their mail was sent to the Longueville property address. In relation to North Avoca, Mrs Chapman said they received there some personal correspondence (eg cards) as well as some bills.

Findings of fact

98 Although, prior to the hearing, the Tribunal understood the facts in respect of the matter were in dispute, Mrs Chapman was the only witness cross-examined. It was not put to her that she was misrepresenting the time she spent in North Avoca in relation to the relevant periods in question or her connection to the property. Counsel for the Respondent remarked in oral submissions that Mrs Chapman was an honest witness and the Tribunal agreed with that assessment making notes to this effect. The Tribunal observed the demeanour of Mrs Chapman during cross-examination and found her to be a witness of truth.

99 The evidence of the other witnesses was not challenged.

100 The Tribunal makes findings of fact in relation to the narrative above.

Part C – Legislation

101 Land tax is levied and payable on the taxable value of all land in New South Wales, except land which is exempted from taxation under the LTMA : section 7. For each calendar year, tax is charged on land as owned at midnight on 31 December the previous year: section 8.

The 2002 and 2003 land tax years

102 As at 31 December 2001 and 31 December 2002, the Land Tax Management Act 1956 (NSW) (“LTMA”) the relevant provisions relating to the “principal place of residence” exemption from land tax were as follows:

The principal place of residence was defined in s 3(1):

“’principal place of residence’ 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”.

Section 10(1)(r) provided an exemption from land tax as follows:

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

…..
(r) with respect to taxation leviable or payable in respect of the year commencing on 1 January 1998 or any succeeding year, land that has a land value in respect of the year of less than the premium tax threshold and that is used and occupied as the principal place of residence of the owner of the land (or, if there are joint owners, as the principal place of residence of one or more of them) and for no other purpose (except as provided by subparagraph (iii) being,
…
(ii) a parcel of residential land.
…

Section 3(3) LTMA provided:

For the purposes of this Act, in respect of any year in respect of which taxation is leviable or payable, land or a flat is not used or occupied as the principal place of residence of a person unless:

(a) that land or flat and no other land or flat, has, since before the first day of July that last preceded the commencement of that year, been continuously used and occupied by that person for residential purposes and for no other purposes, or

(b) in any other case, the Chief Commissioner is satisfied that the land or flat is used and occupied by that person as the person’s principal place of residence.

Section10(1D) contained a definition of “residential land” for the purposes of s 10(1)(r) as follows:

“residential land means land that is used and occupied for residential purposes and for no other purpose, that use and occupation being use and occupation of a building or buildings designed, constructed or adapted for residential purposes.

The 2004 – 2008 land tax years inclusive

103 During the relevant period from 31 December 2003 to 31 December 2007, the LTMA was amended by The State Revenue Legislation Further Amendment Act 2003, No 80, which transferred the substantive provisions dealing with the “principal place of residence” exemption into Schedule 1A of the LTMA as follows. Accordingly for the 2004-2008 land tax years, section 10(r)(1) LTMA provided that land attracting the “principal place of residence” exemption under Schedule 1A was exempt from land tax. The parts of Schedule 1A relevant for the purposes of the present case are reproduced below.

Schedule 1A Principal place of residence exemption
(Section 10 (1) (r))

Part 1 Preliminary

1 Definitions

(1) In this Schedule:
principal place of residence exemption —see clause 2.
residential land —see clause 3.
taxing date —means midnight on the thirty-first day of December.

(2) For the purposes of this Schedule, a reference to the owner of land includes, if there are joint owners, any one or more of those joint owners.

Part 2 Principal place of residence exemption

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 on 1 January 2004 or any succeeding year, if:

(a) the land has a land value in respect of the year of less than the premium tax threshold, and

(b) the land is:
(i) a parcel of residential land, or
(ii) a lot under the Strata Schemes (Freehold Development) Act 1973 ….

(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.

(3) If the owner of land is entitled to the exemption conferred by this clause, no other person is liable to be assessed for taxation under this Act in respect of the land during the period of the owner’s entitlement to the exemption.

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

3 Residential land—meaning

(1) In this Schedule, residential land means land that is used and occupied for residential purposes and for no other purpose, that use and occupation being use and occupation of a building or buildings designed, constructed or adapted for residential purposes, other than a building or buildings:
(a) comprised of lots within a strata plan or residential units, or
(b) containing (out of the total of all rooms in the building or buildings) occupancies other than that of the owner, or
(c) from any part of which income is derived.

(2) …

…

8 Concession for absences from former residence

(1) If the Chief Commissioner is satisfied that:

(a) a person is the owner of land ( the former residence ) that has been used and occupied by the person as his or her principal place of residence for a continuous period of at least 6 months, and

(b) the person uses and occupies other land (whether or not in New South Wales), that is not owned by the person, as his or her principal place of residence,
the person is taken, for the purpose of the principal place of residence exemption, to continue to use and occupy the former residence as his or her principal place of residence.

(2) The maximum period for which a person may be taken, under this clause, to continue to use and occupy a former residence as a principal place of residence is 6 years starting at the end of the last period (of at least 6 months) during which the former residence was used and occupied by the person as a principal place of residence (not including any period for which the person may be taken, under clause 7 or this clause, to have used and occupied the former residence as a principal place of residence).

(3) If the principal place of residence exemption applies to the former residence of a person by operation of this clause, the exemption is revoked if the person is the owner of the former residence at the end of the 6-year period referred to in subclause (2) and fails:
(a) to resume actual use and occupation of the residence as a principal place of residence by the end of that period, and
(b) to continue that use and occupation for at least 6 months.

(4) The effect of the revocation is that the principal place of residence exemption is taken not to have applied to the former residence in respect of any tax year to which, but for the revocation, it would have applied. Land tax liability is to be assessed or reassessed accordingly.

(5) …

(6) This clause applies in respect of the assessment of a person’s ownership of land in a tax year only if the Chief Commissioner is satisfied that no income has been derived from the use or occupation of the former residence in the preceding tax year, except as permitted by subclause (7).

(7) …

104 The Applicants, pursuant to s 100(3) Taxation Administration Act 1996 (“TAA”) bear the onus of proof in the proceedings.

Part D - Issue

105 The issue for the Tribunal is whether for any of the 2002-2008 land tax years inclusive, the North Avoca property was exempt from land tax in the hands of the Applicants by virtue of being land used and occupied by one or more of the Applicants as their “principal place of residence” and for no other purpose for the purposes of the LTMA (Section 10(1)(r)) for each of the 2002 and 2003 land tax years and Schedule 1A for the each of the 2004-2008 land tax years inclusive)?

106 Alternatively, for any of the 2004-2008 land tax years inclusive, can the Applicants rely on the concession in clause 8- “Concession for absences from former residence” in Schedule 1A LTMA?

107 The Applicants lodged objections to the decisions with the Respondent which were disallowed and the Tribunal enjoys jurisdiction under s 96 TAA to review the Respondent’s decisions to assess the owners of the North Avoca property to land tax for that property for the 2002-2008 land tax years inclusive.

Part E - Applicant’s case

108 The Applicants submitted that there could be no doubt that the Applicants resided in the North Avoca property during the relevant tax years.

109 The history of occupation of the North Avoca property and the Longueville property showed that as the years unfolded from 2000-2008 (when the North Avoca property was sold), there was a diminishment in the occupation of the North Avoca property.

110 The North Avoca property was acquired in late 1989 and was owned by the Chapmans until late 2008 (19 years).

111 During this time the North Avoca property was available for thee exclusive use of the Chapman family and was never rented out.

112 The Longueville property has at all times been owned by the trustee company of the CF Trust and full land tax paid.

113 The Applicant submitted that the evidence indicated that Mrs Chapman was providing a significant degree of support and assistance for George and Vicky. For her father, this occurred until his death in 2002 and for Victoria, until her death in 2009.

114 The Applicant submitted that all the evidence indicated that the professional carer services recognised that it was because of Mrs Chapman’s residence at the North Avoca property that she was able to give so much time to George and Vicky. Further, all the evidence indicated that the carers were aware that the Chapmans had business interests in Sydney and stayed in Sydney, on occasion and regularly, to attend to those business interests.

115 The Applicants referred to the involvement of Mr Chapman in the Sisters of St Joseph retreat project from June 2001 to November 2004 and the greater time that he spent at the North Avoca property during this period. The Applicants acknowledged that Mr Chapman also spent time at the Longueville property dealing with other aspects of his business and that Mrs Chapman was also required from time to time to spend time at the Longueville property to attend to their property and business interests.

116 The Applicants submitted that the gas, electricity and telephone bills for the Longueville property were consistent with the use of the property for the purposes of an ongoing business and as a place of accommodation for the Chapman children or Mr and Mrs Chapman when they were in Sydney. The fact that these bills were addressed to the Longueville property was because Mrs Chapman organised payment and that was where she undertook the administrative duties of the company.

117 The Applicants submitted that there was nothing in the invoices to show that the North Avoca property was not used as a residence for the Chapmans in the periods 2001-2004 in particular. Further from 2005-2006 there was nothing to suggest that Mrs Chapman was spending more time in Longueville although it was accepted that Mr Chapman was likely to be more involved in business interests in Sydney during this time.

118 It was submitted that the Applicants can show from 2000 and beyond that the North Avoca property was the principal place of residence of both Mr and Mrs Chapman. Both had extensive periods of habitation at the premises with Mrs Chapman caring for George and Mr Chapman working on the Sisters of St Joseph project completed in November 2004. There was nothing to suggest that the Longueville property was the principal place of residence of the Applicants in the 2002, 2003, 2004 and 2005 land tax years.

119 The Applicants acknowledged that there was a change in the occupation of the North Avoca property in 2007 when Mr Chapman developed a medical condition. This resulted in the placing of the North Avoca property on the market, the moving of Vicky to Sydney and absences for Mrs Chapman from the North Avoca property due to Mr Chapman’s health.

120 The Applicants submitted that the Tribunal would be satisfied on the balance of probabilities that the North Avoca property was the principal place of residence for the Applicants in 2001, 2002, 2003 and 2004 and that this extended for some time until the property was put on the market in January 2007. They said that the Land Notice of Assessment of 1 March 2006 should be set aside.

121 In 2006, as Mrs Chapman was providing significant care for Vicky, on the balance of probabilities, the Applicants said that the Tribunal would be satisfied that her principal place of residence was North Avoca until the beginning of 2007 (i.e. for the purposes of the 2006 and 2007 land tax years). They said the Land Tax Notice of Assessment of 26 June 2009 should be set aside. Following the transfer of Vicky to the Sydney nursing home, it is likely that the use of the North Avoca property diminished.

122 In the alternative, the Applicants submitted the Applicants would be entitled to take advantage of the concession for absence from the former residence under clause 8 of Schedule 1A of the LTMA Act. Even if the Tribunal was not satisfied that the North Avoca property was the principal place of residence of either Mr or Mrs Chapman in 2007, the Tribunal would be satisfied of this in relation to 2002 or 2003. The concession under clause 8 would then be available for a maximum of 6 years. From 2003, this would continue up to 2008 when the North Avoca property was sold.

123 The Applicants placed reliance on Revenue Ruling LT 20. On the basis of paragraphs 6 and 11, they said the Tribunal would be satisfied that the North Avoca property was the principal place of residence. For 2004-2006, even though there was a changing use, the Tribunal could still be satisfied that the Applicants maintained the North Avoca property as their principal place of residence.

124 In further written submissions, the Applicants slightly revised their position and said that from Mr and Mrs Chapman’s time until at least the end of 2004, it was their principal place of residence and thus exempt. From 2005 to 2008 it was also exempt under the provisions of clause 8 of Schedule 1A of the LTMA.

125 In oral submissions, the Counsel for the Applicants acknowledged that the North Avoca property may not have been the principal place of residence of the Applicants in the 2007 and 2008 land tax years but that Mrs Chapman still had a connection to the property as a place of residence. It is a question of “fact” for the Tribunal as to when the shift in the principal place of residence occurred. He further submitted that at least until 2006 it was the principal place of residence for the Applicants and clause 8 meant that an exemption could extend to the 2007 and 2008 land tax years. He also said that any “change” in Mr Chapman’s use up to the end of 2004 did not displace the principal place of residence exemption (i.e. due to either Mrs Chapman’s use of the property or clause 8).

126 The Chapman children were adults from 2000 onwards. The evidence of the eldest daughter and eldest son however corroborated the statements of Mr and Mrs Chapman that the North Avoca property was their “home”.

Part F - Respondent’s case

127 The Respondent noted at the outset that the facts outlined in the witness statements filed on behalf of the Applicants in the proceedings before the Tribunal were in dispute and all witnesses were required for cross-examination. As previously noted, ultimately only Mrs Chapman was cross-examined at the hearing of the matter. Final submissions as to the facts were made orally by the Counsel for the Respondent at the hearing of the matter following that cross-examination.

128 The Respondent submitted that the Applicants had not met their onus of proof under s 100(3) TAA. The TAA did not place any onus on the Respondent (FCT v Dalco 90 ATC 4088 at 4094 (per Deane J). The evidentiary onus cast on taxpayers generally under the income tax laws is to the effect that a taxpayer must prove the relevant assessment is excessive and involves matters “peculiarly within the knowledge of the taxpayer” (McCauley v FC of T 88 ATC 4605).

129 The Respondent noted that in this matter it was peculiarly within the knowledge of the Applicants as to what premises were used and occupied as their principal place of residence and who their acquaintances were who could give evidence to support the use and occupation.

130 Cases in the revenue field have consistently warned against the unqualified acceptance of self-serving statements directed towards the ultimate issue in the case (citing Warriewood Pty Ltd v FCT 93 ATC 4653). The evidence of the Applicants is to be considered with care and the fact that they had not adduced evidence from their adult children who could have assisted them suggested that such evidence would not have been of assistance. (In relation to this last statement, after submissions for the Respondent were filed, the Applicants in fact adduced evidence from two of their adult children Ms Ferguson and Mr Mark Chapman).

131 The Respondent referred to a number of authorities in relation to the meaning of “principal place of residence” and said that relevant matters included evidence of the use of the address of the relevant property as the residential address for the purposes of his/her mail, driving licence, electoral roll, immigration records, income tax returns and telephone bills.

132 The Tribunal could not be satisfied on the basis of witness statements filed for the Applicants that the Applicants used and occupied the Avoca property as their principal place of residence over the relevant taxing periods.

133 At the hearing, the Counsel for the Respondent made, in summary, the following further submissions:

(a) The North Avoca property was a residence but not the principal place of residence.
(b) Pursuant to s 3(3)(a) as the Longueville property is also continuously used and occupied for residential purposes, this provision cannot be satisfied. It is necessary to look to s 3(3)(b) – this should be exercised in accordance in light of authorities including: Chief Commissioner of State Revenue v Aldridge & Anor [2003] NSWADTAP 50 and McNally & Anor v Commissioner of State Revenue [2003] NSWSC 1118.
(b) Clause 8 of Part 2 of Sch 1A did not exist in the 2002 and 2003 land tax years and does not assist the Applicants for those years. Further the original version of clause 8 revoked the concession backwards if a person did not resume occupation as a principal place of residence. The current version provided to the Tribunal applied from 2005.
(c) In relation to principal place of residence, the place where one’s husband and family are ought to be given greater weight. In light of the background to the purchase of the Longueville property uncovered in cross-examination- Longueville was the principal place of residence of the Chapmans in the 80’s and 90’s.
(d) In 1996 when George moved to North Avoca and then Kincumber, Mrs Chapman did not “relinquish” Longueville as her principal place of residence. Her clothes were still at Longueville-she had others at North Avoca. She was spending time at North Avoca to look after her father – she was not there because she had decided. Time alone did not make North Avoca a principal place of residence.

(e) The evidence filed by the Applicants amounted to conclusionary statements.
(f) The s 58 documents supported that the Longueville property was the principal place of residence of the Applicants. Counsel made a number of submissions regarding particular documents.

Part G - Discussion and Reasons for Decision

2002-2003 land tax years

Principal place of residence

134 The definition of “principal place of residence” in section 3(1) LTMA acknowledges that a person may reside at more than one place, as was the case for Mr and Mrs Chapman during the relevant land tax years. It provides that only one of those places however can constitute the “principal” place of residence: Aronstan v Chief Commissioner of State Revenue [2008] NSWADT 8; Chief Commissioner of State Revenue v Paspaley [2008] NSWCA 184 at [19], Chief Commissioner of State Revenue v Mesiti [2003] NSWADTAP 56 at [37]; Carey v Chief Commissioner of State Revenue [2010] NSWADT 78.

135 In Chief Commissioner of State Revenue (RD) v McIlroy [2009] NSWADTAP 21, the Appeal Panel at [44] set out a useful summary of factors that might be considered in relation to this matter as originally referred to in CCSR v Ferrington [2004] NSWADTAP 41, albeit in the context of the First Home Owner Grant Act 2000:

The factors referred to in Ferrington have been widely adopted in decisions under the First Home Owner Grant 2001. They may be summarised as follows (at [42], with dot points added for clarity and case references removed for ease of reading):-

· First, the words “principal place of residence” should be given their ordinary meaning in the context in which they appear ... Thus the Commissioner’s reference to the provisions of the Land Tax Management Act 1956 is of no assistance.

· Secondly, consideration of whether a person has been residing or occupying premises as their principal place of residence is to be assessed objectively, in the light of the circumstances relating to the actual occupation of the dwelling ...

· Thirdly, the intention of the person concerned, gauged objectively, is relevant but not determinative of the issue ...

· Fourthly, to occupy a home as his or her principal place of residence a person’s occupation must have a degree of permanence to it: a connection to a place of residence of a transient, temporary, contingent or passing nature is not sufficient, nor is occupation for some other purpose ...

· Fifthly, the short length of a person’s residence, while relevant, is not determinative of the issue. ... This is so since a recipient’s occupation of a home, while short, may have the requisite degree of permanence to it. But that will not happen if, when considered objectively, the occupation was transient, temporary, contingent or of a passing nature, or for some other purpose. One may occupy premises for a short time on a transient, temporary, or contingent basis, but one can also occupy for a short time as one's principal place of residence. It is the nature of that occupation which provides the element of permanence. The fact that a period of actual occupation is short, as in the present case, will in practice make it harder for a recipient to show that the occupation was as his or her principal place of residence, but it will not make it impossible ....

· Sixthly, the reasons for a person’s departure from the home must be both reasonable and adequately explained when considered objectively in the light of their personal circumstances ... In Bates the Tribunal said that “whether the reasons for not residing at the property were as a result of matters entirely out of the control of the applicant” was a factor to be considered. While that is undoubtedly correct, it should not be read as stipulating a requirement that the reasons for departure must be entirely out of that person’s control. The facts in Gaines illustrate that there are circumstances, peculiar to the individual concerned, which may, objectively viewed, adequately and reasonably explain a person’s decision to move out of a property, but which are not entirely out of the person’s control.

45 Because the Appeal Panel in Ferrington was reviewing a decision made under the First Home Owner Grant 2001, it did not consider it appropriate to adopt the meaning of the words “principal place of residence” as used in the Land Tax Management Act . However, this Appeal Panel considers that the factors in Ferrington , while not formulated for applying the specific legislation relevant here, are nevertheless of assistance in construing that legislation. They are not necessarily determinative, and do not displace the developed case law on the meaning of the phrase where it is used in the Land Tax Management Act.

136 In Carey v Chief Commissioner of State Revenue [2010] NSWADT 78, Judicial Member Perrignon usefully summarised some other authorities in relation to “principal place of residence”:

The word ‘principal’ is not defined in the Act. Construed in accordance with its ordinary meaning, it denotes the ‘primary’ or ‘main’ residence. Among the meanings ascribed to it in The Macquarie Online Dictionary are: ‘first or highest in rank, importance, value, etc; chief; foremost’.

31 The question as to which of two or more residences is the ‘principal’ one is to be determined objectively, having regard to the extent and quality of its use and occupation: Cameron v Chief Commissioner of State Revenue [2009] NSWADT 64 at [46]. The issue has been described as one of ‘fact and degree’: Downie v Chief Commissioner of State Revenue [2003] NSWADT 233 at [26]. The respective amounts of time which the taxpayer spends in each residence is a relevant factor: Chief Commissioner of State Revenue v McIlroy [2009] NSWADTAP 21 at [41].

137 In Chief Commissioner of State Revenue v Mesiti [2003] NSWADTAP 57 at [30] the Appeal Panel noted that:

The address of a person on a licence or on an electoral roll is evidence, but not conclusive evidence, on the question whether that address is the principal place of residence.

138 The Respondent also referred the Tribunal to a useful passage from Yen Cheng Chuang & Anor v Chief Commissioner of State Revenue [2009] NSWADT 160 at [19] (which decision was upheld by the Appeal Panel) in relation to the meaning of “principal place of residence”.

139 Having regard to the abovementioned authorities and the evidence before the Tribunal, the Tribunal notes the following:

(a) The evidence of Mrs Chapman was that in 2001 she spent an average of 3-4 days looking after George (paragraphs 53-54 above). Mr Chapman confirmed this evidence and their daughter Ms Ferguson thought it was 4-5 days per week (paragraph 55). Accordingly about half of Mrs Chapman’s time, on her own evidence in respect of 2001, was physically spent in North Avoca at the North Avoca property. George’s doctor, Dr Husodo independently confirmed that he was aware that Mrs Chapman looked after her father in his final years (paragraph 30-31).

(b)Mrs Chapman had made a decision back in 1995 to care for her father which resulted in George and Vicky coming to North Avoca to stay with her full-time at the North Avoca property in 1996 for 3 months and then moving to a retirement village ten minutes away (paragraph 49 and paragraphs 24-28). Her intention was that she would care for her father. On the basis of the evidence, Mrs Chapman still held that intention in 2001 up to George’s death in March 2002.

(c) Following George’s death, Mrs Chapman’s intention was to care for Vicky and honour the promise made to George to do so (paragraphs 67-68).

(d) Mrs Chapman said under cross examination that in December 2002 she was spending 3,4 or 5 days per week at North Avoca caring for Vicky (paragraph 68).

(e) In 2001 and 2002 Mr Chapman was spending more time in North Avoca because he was managing the Sisters of St Joseph retreat project (paragraphs 56-59) and he was trying to help and support his wife (paragraph 56). Mrs Chapman said her husband tried to organise meetings there on a Friday or Monday so he could spend the weekend at North Avoca but she admitted that there was no regular structure to the dates and times of those meetings (paragraph 59). This was not a case like Chief Commissioner of State Revenue (RD) v McIlroy [2009] NSWADTAP 21 where there was unexplained separation as to the principal places of residence of otherwise committed spouses with a family. To the contrary, Mrs Chapman provided a cogent reason for why she spent half or sometimes more than half of her time in North Avoca in caring for George, and after his death, for Vicky. Further Mr Chapman was, due to the abovementioned business project in the period from June 2001 to November 2004, still able to spend time with Mrs Chapman in North Avoca . Mrs Chapman also explained in cross examination that North Avoca was only 1 hr and 10 minutes from Sydney.

(f) The occupation of the North Avoca property in both 2001 and 2002 by Mrs Chapman was not of a transient, contingent or passing nature. It was regular and had been so from about 1999 because Mrs Chapman was caring for George and Vicky who were living in a self-contained retirement village and could not drive. By necessity, Mrs Chapman attended to them regularly for the purposes of shopping, taking them to medical appointments and essentially wherever they needed to go. This was confirmed by Dr Husodo (paragraph 31), Mr Star (para 35) ,Ms Ferguson (paragraph 34 and 71) and Mark Chapman (paragraph 72).

(g) Mrs Chapman’s residence of the North Avoca property, being at least half, if not more than half, of each week in 2001 and 2002 had a degree of permanence about it. She was there looking after George and Vicky and later Vicky alone. Mark Chapman said that his mother spent much of her time at North Avoca not only because George needed her help and support but because she also loved being there (paragraph 62). Mrs Chapman’s presence at North Avoca was far from “usually (if not exclusively) over holiday periods” (refer Chief Commissioner of State Revenue (RD) v McIlroy [2009] NSWADTAP21) – instead the evidence from Mr and Mrs Chapman (and, importantly, confirmed by independent witnesses, Dr Husodo, Mr Star and the letters from Ms Armstrong, Father Akehurst and the Chapman’s friend in Terrigal, together also with two of their adult children) was that it was regular and committed.

(h) The property at North Avoca had all the essentials of a “home” according to Mrs Chapman (paragraph 9). Mrs Chapman confirmed in cross examination that she had clothes and personal effects at North Avoca. She admitted that she still had some clothes at Longueville and the Tribunal finds that this was consistent with the fact that Longueville was a place of residence for Mrs Chapman when she was in Sydney attending to administrative duties from time to time.

(i) The Tribunal considers that the reasons given for Mrs Chapman’s departure from the North Avoca property each week, being to attend to her duties in Mr Chapman’s business (paragraph 53), was a reasonable explanation. Mrs Chapman freely admitted that she would come back to Sydney to attend to these duties.

(j) There was no precise evidence before the Tribunal from Mr Chapman about the time he physically spent in the North Avoca property each week. The Tribunal accepts that he spent time on weekends and sometimes additional Fridays and Mondays during the period from June 2001 to November 2004 when he was working on the Sister’s of St Joseph project (paragraph 54, 56, 57-59) however there was insufficient evidence to conclude, unlike Mrs Chapman, that the North Avoca property was his principal place of residence in the 2002 and 2003 land tax years. From the evidence there was, it appeared likely to the Tribunal that his business interests in Sydney meant that he spent the majority of his time, on average, in Sydney and therefore residing at the Longueville property. There was sufficient business activity going on in Sydney such that Mrs Chapman had to spend a little less than half the week, on average, attending to administrative duties.

(k)By 2001 all of the Chapman children had left school and were studying, travelling or working. They were all adults. Neither Ms Ferguson nor Mark Chapman who gave evidence were living at Longueville in 2001 and 2002 (paragraph 55 and paragraph 62). This was not therefore a case where an owner of land had a young or dependent-age family living in a different location to the owner’s asserted principal place of residence.

(l) The Tribunal has examined the evidence in the s 58 documents that showed the Longueville address for both Mr and Mrs Chapman on official documents. At the same time, the Tribunal has taken into account the evidence from Mrs Chapman as to the administrative convenience of having most mail addressed to the Longueville address. This was consistent with the evidence that Mr Chapman (and to a lesser extent, Mrs Chapman) that they spent time in Sydney each week due to Mr Chapman’s business interests in Sydney. During these visits to Sydney, it was Mrs Chapman’s role to deal with these administrative affairs. It is also consistent with Mr Chapman continuing to reside at the Longueville property. Further as the Appeal Panel said in the mesiti decision (supra, 2003 NSWADT 57 at [30]), this evidence is to be taken into account but is not in itself conclusive and the Tribunal finds the Applicants, in particular, Mrs Chapman, had a reasonable explanation.

(m) The Tribunal finds that the facts of the present case differ to that in the decision of the Supreme Court in McNally & Anor v Chief Commissioner of State Revenue [2003] NSWSC 1118 (at [40]-[43]). This was not a case of “a married couple that spent a majority of time in what had indisputably been the principal place of residence of both of them in the past and an extended weekend in premises enjoyed by them for annual holidays”. Instead the present case was closer to that described by Gzell J at paragraph [41] of the same case: here, Mrs Chapman was spending between 3, 4 or 5 days per week at North Avoca (noting this had been the case for her since the late 1990’s (paragraph 33)) and then returning to Sydney to attend to administrative affairs for her husband in Sydney. Mr Chapman would on occasion on weekends and some Mondays/Fridays from June 2001 to November 2004 go up to North Avoca but it was not a case where the couple were spending the larger part of their week together in Sydney and weekends together at North Avoca.

(n) The commitment made by Mrs Chapman to her father in 1996 (and certainly from 1999 when he was no longer able to drive) and the evidence as to the time and care she gave to George and Vicky in 2001 and 2002 have led the Tribunal to conclude that Mrs Chapman had “relinquished” Longueville as her principal place of residence. At a time in her life when her children were becoming adults and pursuing their own lives, Mrs Chapman lived the main part of her life in North Avoca at the North Avoca property in order to take care of her father and Vicky in their later years.

140 For the foregoing reasons, the Tribunal has concluded that the North Avoca property was the principal place of residence of Mrs Chapman in respect of the 2002 and 2003 land tax years (McNally & Anor v Chief Commissioner of State Revenue [2003] NSWSC 1118 (at [47]). The additional requirements of s 3(3) LTMA are considered below.

141 The Tribunal has not formed the same conclusion in respect of Mr Chapman due to a lack of specificity of the time actually spent by Mr Chapman at the North Avoca property in 2001 and 2002 and/or other evidence to show that he had relinquished Longueville as his principal place of residence. The Tribunal is conscious of the evidence that indicated that his business activities (with the exception of the Sisters of St Joseph project) appear to have been predominantly based in Sydney. This is not to say that Mr Chapman did not spent time at North Avoca and from time to time, when he could, resided with his wife.

The requirements of Section 3(3)

142 It was noted in Chief Commissioner of State Revenue v Mesiti [2003] NSWADTAP 57 that s 3(3) LTMA:

This subsection contemplates that, by ordinary canons of construction, a parcel of residential land, for example, might well qualify as being the principal place of residence of a person, as defined in S. 3(1), but it proceeds to exclude it from being dealt with as such for the purposes of the Act, (such as the exemption contained in S.10(1)(r)), unless it meets one or other of the two possible further tests that it contains. Those two tests are set out in subparagraphs (a) and (b). Subparagraph (b) comes into play only when subparagraph (a) does not apply.

143 In the present case, s 3(3)(a) looks to whether the North Avoca property and no other land (eg the Longueville property) has since before 1 July 2001 (in the case of the 2002 land tax year) and before 1 July 2002 (in the case of the 2003 land tax year) been used and occupied by the Mrs Chapman for residential purposes and for no other purposes.

144 On the basis of the evidence of Mr and Mrs Chapman, s 3(3(a) cannot be satisfied. They both admitted that they spent time in Sydney each week attending to Mr Chapman’s business interests – at these times they resided at the Longueville property. The Longueville property was both “used” (Commissioner of Land Tax v Christie [1973] 2 NSWLR 526 at 533) and “occupied” (Commissioner of Land Tax v Christie, supra at 533-534; refer also Flaracos v Chief Commissioner of State Revenue [2003] NSWSC 68 per Gzell J) within the meaning of those authorities, continuously, by the Applicants for residential purposes. Likewise, the North Avoca property was used and occupied continuously by the Applicants for residential purposes and for no other purposes.

145 Accordingly, in the circumstances, it is necessary to turn to s 3(3)(b) to determine whether the Tribunal is satisfied that the North Avoca property was used and occupied by Mrs Chapman as her principal place of residence. Section 3(3)(b) was considered in Chief Commissioner of State Revenue v Aldridge & Anor [2003] NSWADTAP 50 and at paragraph [12] the Appeal Panel noted that it was implicit in s 3(3)(b) that the time at which the Chief Commissioner (or Tribunal) must be satisfied that the land is used and occupied by the owner as the owner’s principal place of residence must be as at midnight on the 31st day of December immediately preceding the land tax year (in the present case, this would be 31/12/01 for the 2002 land tax year and 31/12/02 for the 2003 land tax year).

146 The Respondent submitted that the discretion in s 3(3)(b) ought to be exercised according to the outline by the Appeal Panel in the Aldridge decision as follows:

6 We agree with the Appellant that the Tribunal at first instance erred at law in holding that the Chief Commissioner had a discretion to treat the Respondents’ Croydon property as the Respondents’ principal place of residence and in purporting to exercise that discretion in favour of the Respondents. Section 3(3)(b) of the Act does not confer a true discretion on the Chief Commissioner. If the evidence of the factual circumstances supports that a particular parcel of land or a flat is used and occupied by a person as the person’s principal place of residence (as defined in Section 3(1) of the Act) as at midnight on 31 December in a particular year, the Chief Commissioner must be “satisfied” of that fact. If the factual circumstances do not support that a particular parcel of land or a flat is used and occupied by a person as the person’s principal place of residence as at midnight on 31 December in a particular year, the Chief Commissioner cannot be “satisfied” of that fact.

147 In the present case, the Tribunal is satisfied, for the reasons outlined above, that Mrs Chapman used and occupied the North Avoca property as her principal place of residence as at 31 December 2001 and 31 December 2002. There is no doubt that the North Avoca property was at these times “used” and occupied” (within the meaning of those words in authorities such as Commissioner of Land Tax v Christie, supra at 533-534) for residential purposes by Mrs Chapman.

148 Further, in light of the fact that the condition of George was deteriorating in 2001 and he passed away early in the 2002 land tax year (March) and that following his death, Vicky was diagnosed with dementia (Dr Husodo said this was in 2002-2003), the facts indicate that at these times Mrs Chapman’s principal place of residence was at the North Avoca property. Both George and Vicky lived in a self-contained retirement village without care facilities. There was much evidence, confirmed also by witnesses outside the family, that this meant that Mrs Chapman had to assist with day to day activities for George and Vicky, which was all made possible because she was residing at North Avoca. As Ms Ferguson put the position in relation to Vicky after George’s death – “she totally depended on Mum”.

149 In respect of paragraph 12 of Revenue Ruling LT 20 (that applied until 31 December 2003), as drawn to the attention of the Tribunal by the Respondent, the Tribunal notes that that paragraph provided examples of when the discretion in s 3(3)(b) might be exercised and that “each case will be considered on its merits”. It is noted that the decision in Aldridge stated that s 3(3)(b) was not a true discretion, in any event, and the real question is whether the factual circumstances supported that the land in question was used and occupied by the relevant person as that person’s principal place of residence as at midnight 31 December of the immediately preceding year to the land tax year.

150 It is noted that because Mrs Chapman is a “joint owner” of the North Avoca property with her husband, the fact that the North Avoca property is the principal place of residence of Mrs Chapman, means that the North Avoca property will be exempt from land tax in the relevant years pursuant to s 10(1)(r) LTMA. This was common ground between the parties if the Tribunal found that the property was the principal place of residence of either Mr or Mrs Chapman or both.

2004-2008 land tax years

151 In relation to Part 2, clause 2(1), it was not in dispute in any of the 2004-2008 land tax years that the North Avoca property had a land value of less than the premium tax threshold (clause 2(1)(a)) nor that the property was land that was “a parcel of residential land” (clause 2(1)(b)(i) and clause (3)).

152 Similarly to the 2002-2003 land tax years, Part 1, clause 1(2) specifies that a reference to the owner of land includes if there are joint owners, any one or more of those joint owners. In other words, if the Tribunal was to find the North Avoca property was the principal place of residence of either Mr or Mrs Chapman or both, then land tax would not apply in the relevant land tax years.

Principal place of residence- Schedule 1A, Part 2(1)

2004 land tax year

153 In 2003 and 2004, the evidence was that Mrs Chapman was looking after Vicky and assisted in Vicky’s day to day activities (paragraph 67, 68, 69, 71). Dr Husodo was able to confirm that from 2003-2007 Mrs Chapman was always present at Vicky’s medical appointments, that Mrs Chapman did most of the driving for Vicky and managed Vicky’s daily needs primarily on her own with assistance from nurses and staff at the retirement village. The daily assistance to Vicky was possible because Mrs Chapman was residing at the North Avoca property. This was confirmed by Mr Star, the solicitor.

154 Mrs Chapman said also that her children were all doing different things by this time and she and her husband were able to spend more time at North Avoca.

155 Mr Chapman was at this time working on the project at Kincumber and able to visit Mrs Chapman. He confirmed that Vicky’s dependent nature meant that the Applicants spent more time at the North Avoca property and less time away in Sydney.

156 The Tribunal has concluded from the evidence that as at 31 December 2003, Mrs Chapman continued to use and occupy the North Avoca property as her principal place of residence and for no other purpose (Part 2, clause 2(1) of Schedule 1A). She was able to care for Vicky’s day to day activities because of her residential proximity to Vicky.

157 In relation to Part 2, clause 2(2)(a), this was not satisfied because Mrs Chapman used and occupied both the North Avoca and Longueville properties continuously for residential purposes and no other purposes. However pursuant to Part 2, clause 2(2)(b), the Tribunal is satisfied for the reasons above that the North Avoca property was used and occupied as Mrs Chapman’s principal place of residence as at 31 December 2003.

2005 land tax year

158 The evidence in relation to 2004 and 2005 in respect of Mrs Chapman’s presence at the North Avoca property was the essentially the same. She was still caring for Vicky’s daily needs as confirmed by Dr Husodo.

159 Mr Chapman’s project in Kincumber had finished in November 2004. The evidence indicated that, certainly by 2005, his business interests in Sydney seem to have occupied much of his time and the Tribunal infers that he was primarily residing in Sydney at the Longueville property.

160 The Tribunal has concluded from the evidence that nothing of note had changed in so far as Mrs Chapman’s place of residence from that previously discussed in relation to the 2002-2004 land tax years, and that as at 31 December 2004, Mrs Chapman continued to use and occupy the North Avoca property as her principal place of residence and for no other purpose (Part 2, clause 2(1) of Schedule 1A).

161 Similarly to the prior land tax year, Part 2, clause 2(2)(a) was not satisfied because Mrs Chapman used and occupied the North Avoca and Longueville properties continuously for residential purposes and no other purposes since 1 July 2004.

162 However, pursuant to Part 2, clause 2(2)(b), the Tribunal is satisfied that for the reasons stated above, the North Avoca property was used and occupied as Mrs Chapman’s principal place of residence as at 31 December 2004.

2006 land tax year

163 The evidence in relation to 2005 and 2006 in respect of Mrs Chapman’s presence at the North Avoca property was similar to the prior land tax year. However Mrs Chapman said that Vicky started getting worse in 2005.

164 The evidence indicated that Mr Chapman was spending time in Sydney in 2005 and 2006 with his businesses. In particular, Mark Chapman said he was the licensee of the family hotel in Surry Hills in 2005. The Tribunal infers that these business interests meant that Mr Chapman was primarily residing in Sydney at the Longueville property.

165 The Tribunal has concluded that as at 31 December 2005, Mrs Chapman continued to use and occupy the North Avoca property as her principal place of residence and for no other purpose (Part 2, clause 2(1) of Schedule 1A).

166 Similarly to the prior land tax year, Part 2, clause 2(2)(a) was not satisfied because the Applicant used and occupied the North Avoca and Longueville properties continuously for residential purposes and no other purposes since 1 July 2005.

167 However, the Tribunal is satisfied that for the reasons stated above, the North Avoca property was used and occupied as Mrs Chapman’s principal place of residence as at 31 December 2005 for the purposes of the 2006 land tax year (Part 2, clause 2(2)(b)).

2007 land tax year

168 In the 2006 calendar year, as discussed above, nothing much had changed in relation to Mrs Chapman’s presence at the North Avoca property. In 2006, it is clear that Vicky had deteriorated and if anything, the Tribunal infers that Mrs Chapman’s presence in North Avoca increased. Vicky was assessed by the ACAT team on 23 January 2006, 31 August 2006 and then again on 9 May 2007 and Mrs Chapman was present at all assessments. Dr Husodo confirmed that Mrs Chapman was appointed as “principal carer” of Vicky by the Central Coast Community Aged Care Services in 2006 as did Ms Armstrong.

169 Mrs Chapman admitted in cross examination that her daughter was married in 2006 and she spent a lot of time in Sydney working on that and also, as in prior years, working in her husband’s business. She would during these times reside at the Longueville property and share meals with the family etc. However the rest of the time she would be at the North Avoca property looking after Vicky. Mrs Chapman would also entertain friends at the North Avoca property.

170 The Tribunal has concluded that as at 31 December 2006, Mrs Chapman continued to use and occupy the North Avoca property as her principal place of residence and for no other purpose (Part 2, clause 2(1) of Schedule 1A).

171 Similarly to the prior land tax years, Part 2, clause 2(2)(a) was not satisfied because the Applicant used and occupied both the North Avoca and Longueville properties continuously for residential purposes and no other purposes since 1 July 2006.

172 The Tribunal is satisfied that for the reasons stated above, the North Avoca property was used and occupied as Mrs Chapman’s principal place of residence as at 31 December 2006 for the purposes of the 2007 land tax year.

173 It is noted however that things changed significantly in 2007 (January) when Mr Chapman was diagnosed with his medical condition. This meant that Mrs Chapman had to divide her time between looking after her husband and Vicky. Mrs Chapman also said that at the same time Vicky’s health was deteriorating. She needed to “reassess” matters. Mr Star confirmed that he discussed these matters with Mr and Mrs Chapman and that a decision was taken to put the North Avoca property on the market in January 2007 to relieve stress to the Applicants.

174 By July 2007, the Applicants had assisted Vicky to move to a nursing home in Sydney.

2008 land tax year

175 As at 31 December 2007, the North Avoca property was on the market. Vicky had been in Sydney since July 2007. There was no evidence that Mrs Chapman continued to reside in the North Avoca property after that time. Instead the evidence was to the effect that Mrs Chapman was caring for her husband and Vicky in Sydney and residing at the Longueville property. The Tribunal infers that Mrs Chapman, between January and July 2007 when she made her “re-assessment of matters”, was caring for Mr Chapman in Sydney and organised for Vicky to be admitted to a nursing home in Sydney, relinquished the North Avoca property as her principal place of residence.

176 Accordingly, the Tribunal has concluded that the North Avoca property was not used and occupied by Mrs Chapman as her principal place of residence as at 31 December 2007 for the purposes of Part 2, clause 2(1) of Schedule 1A. As Part 2, clause 2(1) of Schedule 1A was not satisfied, it is not necessary to consider Part 2, clause 2(2) of Schedule 1A.

The concession for absences from former residences in Schedule 1A, Part 2, clause (8)

177 However the Applicant submitted that to the extent that the Tribunal found as a matter of fact that the North Avoca property was the principal place of residence of Mrs Chapman for any of the land tax years in question, then the “Concession for absences from former residences” in Clause 8 of Schedule 1A should be considered.

178 In relation to the application of Clause 8 in the present case for the purposes of the 2008 land tax year, the Tribunal notes the following:

(a) Clause 8(1)(a): Mrs Chapman was the owner of the North Avoca property that was “used” and “occupied” by Mrs Chapman as her principal place of residence for a continuous period of at least 6 months. The Tribunal has found that the property was so used and occupied from at least 2001-January 2007.

(b) Clause 8(1)(b): Mrs Chapman used and occupied other land, being the Longueville property, such property not being owned by her, as her principal place of residence. The Tribunal has found that this is likely to have been the case from between January-July 2007 to 31 December 2007 and beyond.

179 In the circumstances, Clause 8(1) provides that Mrs Chapman is taken, for the purposes of the principal place of residence exemption to continue to use and occupy the North Avoca residence as her “principal place of residence”. Clause 8(2) says that the maximum period for which Mrs Chapman may be taken under this clause to use and occupy the former residence (ie the North Avoca property) as a principal place of residence is 6 years starting at the end of the last period of at least 6 months during which the former residence was used and occupied by the person as a principal place of residence – the Tribunal has concluded that this would be the period between July 2006-December 2006. As the North Avoca property was ultimately sold in December 2008, Clause 8(3) would not result in any loss of the concession for Mrs Chapman.

180 Accordingly, under the concession available in Clause 8(1), the Tribunal has concluded that Mrs Chapman would be deemed, for the purposes of the principal place of residence exemption to continue to use and occupy the North Avoca property as her principal place of residence as at 31 December 2007 for the purposes of the 2008 land tax year.

181 It is noted that the Applicant submitted that Clause 8(1) might have also operated in earlier land tax years if the Tribunal had concluded that the principal place of residence exemption was satisfied by either or both of the Applicants for some only of the 2004-2007 land tax years inclusive. The Tribunal agrees that that might well have been the case but as the Tribunal has concluded that the North Avoca property was Mrs Chapman’s principal place of residence up to and including the 2007 land tax year, it is not necessary to consider Clause 8 in respect of any other land tax year other than the 2008 land tax year.

182 The Applicants also relied on Revenue Ruling No. LT 82 at page 4 in relation to the concession in clause 8. In particular they noted (and the Tribunal agrees) that were the land is sold before the end of the 6 year period of “absence” from the principal place of residence, the requirement for the owner to re-occupy the residence is extinguished. This means in the present case, the sale of the property in December 2008 means that any obligation of Mrs Chapman to re-occupy the North Avoca property is extinguished and the concession would not be revoked for the North Avoca property for the 2008 land tax year.

183 For the forgoing reasons, the Tribunal makes the following order:

(a) The Respondent’s decision to assess the Applicants for land tax for the 2002-2008 land tax years inclusive in respect of the North Avoca property is set aside and a decision substituted that Mrs Chapman was entitled to the principal place of residence exemption in respect of the North Avoca property for each of the 2002-2008 land tax years inclusive.