Curnow v Chief Commissioner of State Revenue

[2004] NSWADT 116

CITATION:	Curnow v Chief Commissioner of State Revenue [2004] NSWADT 116
DIVISION:	Revenue Division
PARTIES:	APPLICANT Lesley Margaret Curnow RESPONDENT Chief Commissioner of State Revenue
FILE NUMBER:	036041
HEARING DATES:	12/03/2004
SUBMISSIONS CLOSED:	03/26/2004
DATE OF DECISION:	06/09/2004
BEFORE:	Hole M - Judicial Member
APPLICATION:	Land tax exemption - principal place of residence
MATTER FOR DECISION:	Principal matter
LEGISLATION CITED:	Land Tax Management Act 1956
CASES CITED:	Chief Commissioner of State Revenue v Aldridge & Anor [2003] NSWADTAP 50 ISPT Nominees Pty Ltd v Chief Commissioner of State Revenue [2003] NSWSC 697 Poullos v Chief Commissioner of State Revenue [2003] NSWADT 32 Rankine v Chief Commissioner of State Revenue [2003] NSWADT 38 Stature Pty Ltd v Chief Commissioner of State Revenue [2002] NSWADT 271
REPRESENTATION:	APPLICANT R Curnow, agent RESPONDENT H Roberts, solicitor
ORDERS:	That the applicant is liable for the assessment of land tax for the land tax year 1998 as assessed and is not liable for any interest or penalties in respect of payment of that amount.

Introduction

1 The applicant has applied for a review of the decision of the Chief Commissioner of State Revenue not to exempt her property at Burraneer from assessment for land tax for the year 1998.

Background

2 The applicant purchased the subject property in 1992 and resided there with her husband at various times. She purchased another property in 1995 and that property became her principal place of residence and was considered to be that by the Chief Commissioner of State Revenue as at 31 December 1997.

3 The subject property had been rented out by the applicant between 30 January 1995 to the relevant date on which the tenants moved out of the property being some time in early December 1997.

4 On 12 November 1997 the applicant exchanged contracts for sale on the subject property. The tenants vacated the property in December 1997 and settlement of the sale of the property occurred on 2 February 1998.

5 The applicant was the owner of the property as at 31 December 1997 being the relevant date although she had a contract to sell the property it was on the basis of a normal 10% deposit.

6 In the ordinary course of events it was expected that the settlement of the sale of the subject property would take place on 29 December 1997. Due to circumstances beyond the applicant’s control the settlement of the sale did not occur until 2 February 1998.

The applicant’s argument as to liability

7 The applicant has submitted that although she considered the property was not hers following the exchange of contract that she moved back into the property which then became her principal place of residence immediately following the vacation of the property by the tenants in December 1997. She was at the property during the period from late December 1997 to January 1998 to prepare for final settlement of the sale.

8 The representative of the applicant submitted that the applicant had moved back into the premises for a short term period to make it ready for the completion of the sale and that the applicant was actually occupying the premises during that period.

9 Various submissions were made on behalf of the applicant and the applicant provided documentation, by way of correspondence, setting out the history of her correspondence with the Chief Commissioner of State Revenue including the following:

a) letter dated 20/1/98 enclosing a land tax questionnaire. That letter refers to the subject property being “…. sold in November. 97.”

b) letter dated 30/1/03. This letter refers to “the property had always been principal place of residence except for 96, 97 when I rented so as to join my husband who was working …” and “…. we still had furniture and personal effects in what was always our principal home”. This letter also refers to the inclusion of a copy of the letter dated 20 January 1998 and a variation return for the 1998 year.

c) letter dated 14/4/03 referring to “…. the property was my sole place of residence except for a period during 96 and 97, when it was rented. I returned to my home (principal place of residence) in Dec 97. I left in early 98, after it was sold (settled).”.

d) letter dated 22/5/03 to the OSR noting that the settlement had been expected on 29/12.

e) letter dated 20 July 2003.

f) letter dated 27 August 2003. In this letter the applicant maintains that the subject property was her principal place of residence.

10 The respondent had requested the applicant to provide evidence of the property having been her principal place of residence as at 31 December 1997. Some time had passed between that date and when the request was made and the applicant was unable to produce to the Chief Commissioner of State Revenue documentation which satisfied the Chief Commissioner of State Revenue that the property was her principal place of residence at the relevant date. The issue to be determined is related to whether the subject property was indeed the applicant’s principal place of residence as opposed to the unit that she had resided in with her husband previously mentioned.

Delay

11 The applicant submitted a variation return to the Chief Commissioner of State Revenue on 23 April 1998. In that return the applicant claimed that the property had been sold in 1997. The respondent was unable to produce the return and it seems that the file held by the Chief Commissioner of State Revenue in relation to this matter is not complete.

Consequence on compliance activity conducted by the respondent during 2002

12 The Chief Commissioner of State Revenue became aware that the date of settlement of the sale of the subject property occurred on 2 February 1998 and the ensuing correspondence and subsequent assessment resulted from that compliance activity. It is with some concern that I note that the material held by the Chief Commissioner of State Revenue is incomplete especially in view of the circumstances of the situation where the respondent had an expectation that the applicant could supply, in November 2002, sufficient material to satisfy the Chief Commissioner of State Revenue that the subject property had been the applicant’s principal place of residence as at midnight on 31 December 1997.

13 The applicant did not supply evidence to the Tribunal by way of declaration or affidavit to support her claim that the subject property was her principal of residence as at the relevant date and relied on written and oral submissions. The respondent was therefore not able to test those submissions by way of cross examination, and was able only to rely on submissions of the respondent that the land was not the principal place of residence as at the relevant date.

14 The onus is on the applicant to provide material to the respondent and to the Tribunal that the property was her principal place of residence at the relevant date.

15 Both the applicant and the respondent drew attention to the decision by Tribunal Member Block in Rankine v Chief Commissioner of State Revenue [2003] NSWADT 38. In that case the Tribunal Member held that despite sympathy for the situation of the applicants that the Chief Commissioner of State Revenue had no discretion to waive or compromise land tax in that particular case.

16 The respondent referred to the case of Chief Commissioner of State Revenue v Aldridge & Anor [2003] NSWADTAP 50 wherein the Appeal Panel acknowledged that the application of the Act can sometimes produce what might be “harsh results”. The decision in Aldridge does confirm that “calculation of liability and eligibility for exemption [from land tax] is not apportioned for the period of ownership or the period of relevant use during the preceding year”.

17 The decision in Aldridge also considered and found that the Chief Commissioner of State Revenue could not be estopped from administering the law in accordance with its terms and cited ISPT Nominees Pty Ltd v Chief Commissioner of State Revenue [2003] NSWSC 697; Stature Pty Ltd v Chief Commissioner of State Revenue [2002] NSWADT 271.

18 In Rankine there were similar circumstances in that the expected settlement date of the sale was extended for longer than the anticipated 6 weeks and evidence was provided that the taxpayer moved back into the property whilst the settlement did not occur until the following year.

19 Attention was also drawn to Poullos v Chief Commissioner of State Revenue [2003] NSWADT 32 where a similar factual situation existed to that in this case. The move by the applicant, in that case, back into the property was held to be for a specific and temporary purpose and that the property that the applicant had been living in remained the principal place of residence for the applicant. In this particular case the applicant returned to her principal place of residence existent prior to the tenants moving out in December 1997 and the reason for her attending at the subject property was to prepare it for final settlement. The Chief Commissioner of State Revenue was not satisfied that the subject property had attained the status of being the principal place of residence for the applicant during the period December 1997 to settlement in February 1998. I do not consider that any material has been provided, other than the assertions of the applicant, that the subject property was resurrected as her principal place of residence during that period. The written material supports the view that the applicant returned to the property for a specific and temporary purpose being preparation for completion of the sale.

20 The applicant was aware of her land tax liabilities and attended promptly to payment of all land tax liabilities including payments for land tax years 1996 and 1997. The applicant had been involved in approximately 10 sales of land and was aware of land tax obligations although was not aware of the detail and significance of 31 December of each year. The applicant’s concern relates to the lack of an ability to apportion the land tax payable where settlement of sale occurs at some other time during the year rather than immediately prior to 31 December of each year. There is no legislative provision to allow such apportionment notwithstanding the harshness of the legislation.

Decision

21 The Chief Commissioner of State Revenue has not raised any interest component on the assessment and taking into account the delay and incompleteness of the material of the file of the respondent I make the following order:

That the applicant is liable for the assessment of land tax for the land tax year 1998 as assessed and is not liable for any interest or penalties in respect of payment of that amount.