Daghero v Chief Commissioner of State Revenue

[2010] NSWADT 119

CITATION:	Daghero v Chief Commissioner of State Revenue [2010] NSWADT 119
DIVISION:	Revenue Division
PARTIES:	APPLICANTS Dana Valeria Daghero and Jorge Washington Daghero RESPONDENT Chief Commissioner of State Revenue
FILE NUMBER:	096084
HEARING DATES:	30 November 2009
SUBMISSIONS CLOSED:	30 November 2009
DATE OF DECISION:	20 May 2010
BEFORE:	Perrignon R - Judicial Member
CATCHWORDS:	First Home Owner Grant – eligibility for grant –applicant previously owned residential property in NSW – whether held on trustStamp duty – First Home Plus Scheme – eligibility for stamp duty exemption – applicant previously owned residential property in NSW – whether held on trustStamp duty – transfer of interest in land – whether interest held on trust – whether transfer exempt under section 55(1) of the Duties Act 1997
LEGISLATION CITED:	Taxation Administration Act 1996 First Home Owner Grant Act 2000 Duties Act 1997Conveyancing Act 1919
CASES CITED:	Calverley v Green (1984) 155 CLR 242
REPRESENTATION:	APPLICANT A Gwillen, agent RESPONDENT M Robertson, barrister-at-law
ORDERS:	1) Pursuant to section 29 of the First Home Owner Grant Act 2000, the decision of the Chief Commissioner to deny the First Home Owner Grant to Dana Daghero is reversed, and varied so as to provide that the grant be made in her favour 2) Pursuant to section 101 of the Taxation Administration Act 1996, the Chief Commissioner’s reassessment to duty of the transfer of Dana Daghero’s unit at Parramatta is revoked 3) Pursuant to section 101 of the Taxation Administration Act 1996, the decision of the Chief Commissioner to reassess the transfer of Dana Daghero’s interest in the Greystanes property to duty is confirmed.

REASONS FOR DECISION

1 The Applicants, Jorge and Dana Daghero, are father and daughter.

2 In December 2008, Dana Daghero purchased a home unit at Parramatta. She applied for the First Home Owner Grant, and exemption from stamp duty under the First Home Plus Scheme.

3 She knew that she would be ineligible if she had previously owned real property in New South Wales. She was confident of her eligibility, because the Chief Commissioner of State Revenue had previously decided that her 50% share in her father’s house at Greystanes, which had been transferred to him earlier that year, had been held on trust for him.

4 During the ‘cooling off’ period, her transfer was stamped as being exempt from duty. Her application for the First Home Owner Grant was forwarded to the Office of State Revenue for processing. She completed the payment of her deposit on the home unit.

5 On 12 January 2009, the Chief Commissioner declined her application for the First Home Owner Grant, on the basis that she had previously owned a half share in the Greystanes property. On the same basis, he decided on 13 January 2009 to reverse his previous decisions:

1) to exempt from stamp duty the transfer of Dana Daghero’s unit at Parramatta, and

2) to exempt from duty the transfer of her interest in the Greystanes home to her father.

6 He assessed her transfer of the Parramatta unit to duty, and invited her father to submit a valuation of the Greystanes property, so that the transfer to him might similarly be assessed to duty.

7 Dana and Jorge Daghero seek review of these decisions.

Jurisdiction

8 Objection was made to all three decisions. In respect of the decision concerning the transfer of the Greystanes property, Ms Daghero said – and the Tribunal accepts – that she objected on her father’s behalf and at his wish. Leave was granted for her father to be joined as a party to these proceedings. An extension of time to proceed is also granted.

9 As objection has been made, the Tribunal enjoys jurisdiction to review each decision pursuant to section 28(1) of the First Home Owner Grant Act 2000 or section 96 of the Taxation Administration Act 1996.

10 In each case, the relevant applicant bears the onus of proving his or her case: section 28(3), FirstHome Owner Grant Act 2000; section 100, Taxation Administration Act 1996.

Facts

11 Ms Daghero and her father gave evidence by way of statutory declaration. Ms Daghero also gave oral evidence. She explained that her father and mother had owned a family home at Granville, subject to a mortgage. Ms Daghero was their only daughter, and lived with them.

12 In late 2001, her parents decided to move Greystanes, to be nearer to their only son. Such a move would be convenient, as they would be closer to his home, where Mrs Daghero assisted in the care of her grandchild. They identified an appropriate house, and decided to purchase it without first having sold their home at Granville.

13 Jorge Daghero was a toolmaker. He was on workers compensation payments, due to a work-related injury. He was 62 years of age. His wife was not employed. The bank was not prepared to lend to them, as he was not in receipt of a salary, was reaching retirement age, and was too old to undertake a 30-year repayment obligation. The bank made it clear that it would only lend the requisite moneys if Dana Daghero agreed to borrow jointly with her father, owned the Greystanes property with him, and mortgaged it to the bank as security for the loan.

14 To satisfy the bank, Dana Daghero and her father entered into an oral agreement to the following effect. Together, they would borrow the purchase moneys from the bank, and be liable for their repayment. Together, they would purchase the Greystanes property, with the intention that both their names appear on the title. Repayments of principal and interest would be debited by the bank from Dana Daghero’s account. Jorge Daghero would reimburse her in cash for all such payments. She would continue to live with her parents in the Greystanes property. The Granville property would be sold, and the proceeds applied to discharge the loan. Dana Daghero would then transfer her share in the Greystanes property to her father.

15 In her evidence, Ms Daghero said she never regarded herself as the true owner of the Greystanes property.

16 Dana and Jorge Daghero together signed the loan agreement with the bank. Dana Daghero paid a cash deposit of $1,000, which she said was provided by her father. A bank bond for the balance of the 10% deposit was provided by the bank under the loan agreement. The total purchase price was $340,150.

17 Settlement occurred on 16 March 2002. The loan proceeds were applied in satisfaction of the balance of the purchase price. The Greystanes property was transferred into the names of Dana and Jorge Daghero as joint tenants. Ms Daghero said she did not give instructions to her solicitor as to the kind of common ownership which she desired.

18 Ms Daghero lived with her parents in the Greystanes property. In accordance with the agreement, payments of principal and interest were debited to her account, and reimbursed in cash by father to daughter.

19 In November 2004, the Granville property was sold. In accordance with the agreement, the proceeds of sale were applied, inter alia, to satisfy the outstanding loan secured on the Greystanes property. The loan and the mortgage over the Greystanes property were discharged.

20 Ms Daghero did not immediately transfer her interest in the Greystanes property, either to her father, or to her father and mother jointly.

21 In 2005, Jorge Daghero wished to make a will. He wanted to devise his share in the home to his wife, but was concerned as to whether he was able to do so. Jorge and Dana Daghero consulted a second firm of solicitors. They were advised that, if they severed the joint tenancy by a transfer of their interest to themselves as tenants in common, Jorge Daghero could devise his 50% share to his wife, and she could devise her share, if she inherited it, to her son.

22 In August 2005, Jorge and Dana Daghero severed their joint tenancy, by transferring their interest as joint tenants to themselves as tenants in common.

23 At some point, Ms Daghero became aware that her father was not receiving the electricity rebate for pensioners, because her name remained on the title. He had been retrenched from his employment on 14 August 2003, due to his incapacity for work, and became a pensioner.

24 Ms Daghero had also sought advice from the second firm of solicitors on removing her name entirely from the title. They had advised that the only way was to transfer her half share for a consideration equal to the market value of that share. She refused to consider this option, because she did not believe it was right to insist on payment by her father for a share to which she believed he was entitled anyway.

25 In about 2006, she rang the local council for advice on how to transfer her share in some way that did not involve payment to her by her father. They did not provide the answer. She rang about six other government departments seeking advice. They did not provide the answer. She could not recall the name of any of the departments which she rang, or the approximate dates. Eventually, she rang the Legal Aid Commission. They suggested she contact the Office of State Revenue. All these inquiries happened over a long period of time.

26 She first contacted the Office of State Revenue in May 2008. They advised that, if she could establish that she held her interest on trust for her father, she could transfer that interest to him without any duty liability, pursuant to section 55 of the Duties Act 1997. There is no evidence of any suggestion that consideration was required.

27 On 26 August 2008, she provided a statutory declaration to the effect that, though she and her father had purchased Greystanes jointly, and mortgage payments had been deducted from her account, her contribution was negligible, because her father reimbursed her in cash for those payments, and the balance of the loan was discharged with the proceeds of the Granville home. She asked that the title be changed to her parents as tenants in common. The Chief Commissioner had no power to effect a transfer. His power was confined to assessing stamp duty. An officer at the Office of State Revenue advised that only a transfer to Jorge Daghero, as distinct from a transfer to both parents, would attract exemption from duty under section 55, because on her account, she held her share on trust for her father. She amended her request accordingly. The Office of State Revenue accepted her statutory declaration as evidence that she held her share on trust for him.

28 On 28 August 2008, Dana Daghero executed a transfer of her half share to her father. There is no evidence that any consideration was paid for the transfer, and the Tribunal infers that none was paid. On 2 September 2008, the transfer was stamped as being exempt from duty pursuant to section 55(1)(b) of the Duties Act 1997. The transfer was registered, and Jorge Daghero became the sole registered proprietor.

29 He then executed a transfer of his 100% interest to himself and his wife as joint tenants, to the intent that on his death, the property would devolve upon his wife by right of survivorship.

30 Later in 2008, Ms Daghero began to look for a home to purchase for herself, with the intention of ceasing to live with her parents. At that time, her attention turned to her eligibility for the First Home Owner Grant. She had always been aware of the existence of the First Home Owner Grant scheme, but did not consider her eligibility for it until she began to look for a home for herself.

31 Ms Daghero’s evidence was skilfully tested in cross-examination by the Chief Commissioner’s counsel. It was put to her that she did not consider transferring her interest until deciding to look for a home. She denied this.

32 To some extent, her delay of three years in transferring her share to her father supports an inference:

1) that it was not her intention to transfer her interest until she considered her eligibility for the grant, and

2) that the transfer, when ultimately made, was done not with the intention of restoring the title to the rightful owner, but rather to qualify for the grant.

33 However, apart from the delay, there is no convincing evidence to contradict her assertion that she first turned her mind to the First Home Owner Grant after transferring her interest to her father. The delay itself must be weighed against the facts that (a) no consideration was paid to Dana Daghero for transferring her interest; and (b) she had been making enquiries about such a transfer since 2006.

34 The absence of consideration is compelling evidence that she did not consider herself the true owner of her half share in Greystanes. That evidence would remain equally compelling if the Tribunal considered that her desire to apply for the First Home Owner Grant was the catalyst for a transfer which might otherwise have been made later. To that extent, it does not matter whether she formed the intention to transfer before or after considering her eligibility for the First Home Owner Grant.

35 The fact that she had been enquiring about making such a transfer from about 2006 tends to corroborate her evidence that she had transferred her share prior to turning her mind to her own eligibility for the First Home Owner Grant.

36 For those reasons, it is likely that she first turned her mind to her own eligibility for the grant after transferring her interest to her father. The Tribunal infers that she did so, not for the sole purpose of qualifying for the grant, but for the purpose which she alleged – namely, to restore the legal title to the true owner.

37 There was real confusion, however, in her evidence as to who she thought the true owner was. Sometimes she gave evidence that she thought it was her father. At other times, she said she thought it was her father and mother, as reflected in her statutory declaration. This inconsistency is more likely to reflect her own uncertainty as to the true legal position, than to reveal any attempt to mislead the Tribunal, or to give evidence in a carelessness fashion. Having regard to the manner in which she gave her evidence, to the degree to which her evidence was consistent, to her lack of any legal training and her evident uncertainty as to the effect of the law of trusts and transfer, and to the fact that her account on the whole was not so improbable as to give rise to an adverse inference on credit, the Tribunal finds her to be a witness of truth, and makes findings of fact in accordance with her evidence. The Tribunal’s view on her credit was reached at the trial, and its reasons on this issue drawn up soon afterward.

38 Section 11(3) of the First Home Owner Grant Act 2000 provided that a person was ineligible for the grant if, at any time before entering into the relevant contract for purchase of land, that person:

1) held a ‘relevant interest’ in residential property in New South Wales, and

2) ‘occupied the property as a place of residence for a continuous period of at least 6 months’.

39 ‘Relevant interest’ was defined in section 5(1) of the First Home Owner Grant 2000 to include an estate in fee simple, such as was enjoyed by Dana Daghero, first as a joint tenant, and later as a tenant in common. However, section 5(3) excluded from that definition any interest held ‘subject to a trust’.

Legislation – Stamp duty

40 Section 71 of the Duties Act 1997 provided that a purchaser or transferee of land was eligible for exemption from stamp duty under the First Home Plus Scheme only if, among other things, he or she was ‘an individual … who has not at any time owned residential property in Australia (either solely or with someone else) …’.

41 Section 71(6) provided that, for the purposes of section 71, ownership of residential property subject to a trust was to be disregarded.

42 It was common ground that the Greystanes home was ‘residential property’ for the purposes of both Acts, and that Dana Daghero had occupied it as her place of residence for over 6 months.

43 Section 55(1)(b) of the Duties Act 1997 provided that nominal duty was payable on any transfer from an apparent purchaser to the real purchaser if (i) the property was vested in the former on trust for the latter, and (ii) the latter had provided the money for the purchase and any improvements made to it thereafter.

44 Section 55(1A) provided:

‘For the purposes of subsection (1), money provided by a person other than the real purchaser is taken to have been provided by the real purchaser if the Chief Commissioner is satisfied that the money was provided as a loan and has been or will be repaid by the real purchaser.’

Submissions

45 The Applicants argued that the transfer of Dana Daghero’s interest in the Greystanes property to her father was exempt from duty under section 55(1), because it had been held on trust for her father, and he had provided the money for its purchase. There was no evidence that improvements had been made to the property.

46 They also argued that ownership of a share in the Greystanes property did not disqualify Dana Daghero for the First Home Owner Grant, or from exemption from duty in respect of her acquisition of the unit at Parramatta, because Dana Daghero’s share in Greystanes had been held on trust, and therefore did not constitute a ‘relevant interest’ in residential property.

47 In summary, the Chief Commissioner submitted that Dana Daghero had not been constituted a trustee of her share in the Greystanes property, but rather had been its beneficial owner, for the following reasons.

1) There was no express trust, because there was no evidence that she declared herself trustee, and because there was no relationship between Dana and Jorge Daghero – such as that of principal and agent – which could give rise to such a trust. The arrangement with her father amounted to no more than an agreement to purchase the property jointly with him, to borrow the purchase price jointly with him, to permit him to make the repayments, and pay out the loan on sale of the Granville property, and to convey her interest in the Greystanes property to him – or perhaps to him and to her mother – when he discharged the loan to which she was party.

2) Even if the arrangement amounted to an express declaration of trust, section 23C of the Conveyancing Act 1919 operated to prevent any such trust from arising, by reason of the absence of writing.

3) Dana Daghero did not hold her interest on resulting trust for Jorge Daghero, because all but $1,000 of the purchase moneys were provided by both Applicants, who borrowed the funds from the bank. That is so, even if Jorge Daghero reimbursed his daughter for all the mortgage repayments as alleged. This was not a case where Jorge Daghero had provided the entire purchase price, so as to give rise to a presumption that Dana Daghero held her share on resulting trust for him.

4) Even if, contrary to the latter submission, the purchase price was paid entirely by Jorge Daghero, the presumption of advancement would apply, so that Dana Daghero would be presumed the beneficial owner of her share, unless there was evidence of the contrary intention on the part of Jorge Daghero. The Tribunal would not be satisfied of any such contrary intention.

48 The issues for determination may be summarised as follows.

1) Whether at all times Dana Daghero held her interest in the Greystanes property on trust.

2) If so, whether the beneficiary or beneficiaries of the trust provided the entirety of the purchase price or, if the purchase moneys were provided as a loan, repaid the loan moneys.

49 If the first question is answered in the affirmative, Dana Daghero was eligible for the First Home Owner Grant, and for exemption from stamp duty under the First Home Plus Scheme in respect of her purchase of the unit at Parramatta. Otherwise, she was not eligible for either.

50 If the second question is answered in the affirmative, the transfer of her interest in the Greystanes property was also exempt from duty by operation of the section 55(1)(b) of the Duties Act 1997.

51 If either the first or the second question is answered in the negative, that transfer was dutiable.

Whether share held on express trust

52 The Tribunal accepts Ms Daghero’s evidence that, when she acquired a share of the Greystanes property as joint tenant with her father, she did so subject to the arrangement described above. Whether enforceable or not, there was nothing in that agreement in the nature of an express declaration of trust. In the absence of any other evidence that she declared herself trustee of her share in that property, the Tribunal is unable to find that her share – whether as joint tenant or tenant in common – was the subject of an express trust.

53 Nor can the Tribunal infer from Ms Daghero’s evidence an express agreement to purchase the property as agent for her father. The effect of the arrangement was an undertaking to borrow moneys jointly with her father for the purchase of the Greystanes property, to purchase the property jointly with him, and to convey her share to her him on satisfaction of the loan in respect of that property.

54 Even if the Tribunal were satisfied that Ms Daghero’s share was held on express trust, section 23C of the Conveyancing Act 1919 would prevent any such trust from arising, as there is no evidence of any written instrument creating such a trust.

Resulting trust

55 However, section 23C does not operate to exclude resulting, implied or constructive trusts. As the Applicants did not argue that Dana Daghero’s share was subject to an implied or constructive trust, it is appropriate to consider the possibility of a resulting trust.

56 Resulting trusts were considered by the High Court of Australia in Calverley v Green (1984) 155 CLR 242. In that case, a couple living in a de facto relationship jointly purchased a home at Baulkham Hills in Sydney. Mr Calverley provided the entire deposit of $9,250. He and Ms Green jointly borrowed the balance of the purchase price in the sum of $18,000, and granted a mortgage over the house as security for the loan. They purchased the property and borrowed the balance of the purchase price in their joint names, only to satisfy the requirements of their lenders. They intended that all repayments of principal and interest should be made by Mr Calverley, as they were.

57 The High Court found that Ms Green had provided the sum of $9,000, being one half the moneys borrowed, notwithstanding that Mr Calverley ultimately made all the repayments. Gibbs CJ held [at 268]:

‘The amount of $18,000 borrowed under the mortgage was provided equally by the parties, for its was lent to them jointly, on terms which made them jointly and severally liable for its repayment, and, having thus been borrowed, was applied by them in part payment of the purchase price.’

58 He continued [at 258]:

‘The extent of the beneficial interests of the respective parties must be determined at the time when the property was purchased and the trust created. The fact that the mortgage debt was repaid by [Mr Calverley] is therefore not relevant in determining the extent of the interests of the parties in the land, although it may be relevant on an equitable accounting between the parties. The parties each contributed $9,000 of the amount borrowed, and it appears that the remainder of the price, $9,250, was provided by [Mr Calverley] … If [Mr Calverley] did provide the whole of the deposit, [Ms Green’s] proportionate interest in the land was 9,000/27,250.’

59 Gibbs CJ expressed the equitable presumption in favour of a resulting trust as follows [at 246]:

‘Consistently with these principles it has been held that if two persons have contributed the purchase money in unequal shares, and the property is purchased in their joint names, there is, again in the absence of a relationship that gives rise to a presumption of advancement, a presumption that the property is held by the purchasers in trust for themselves as tenants in common in the proportions in which they contributed the purchase money: Robinson v Preston (15); Ingram v Ingram (16) and Crisp v Mullings (17) ( a decision of the English Court of Appeal).’

60 Mason and Brennan JJ likewise held [at 258]:

‘When two or more purchasers contribute to the purchase of property and the property is conveyed to them as joint tenants the equitable presumption is that they hold the legal estate in trust for themselves as tenants in common in shares proportionate to their contributions unless their contributions are equal …’

61 Gibbs CJ continued [at 251]:

‘However, both the presumption of advancement, and the presumption of a resulting trust, may be rebutted by evidence of the actual intention of the purchaser at the time of the purchase: see Charles Marshall Pty Ltd v Grimsley (47). Where one person alone has provided the purchase money it is her or his intention alone that has to be ascertained. In the present case however, both purchasers contributed the purchase money. … Where there are two purchasers, who have contributed unequal proportions, but have taken the purchase in their joint names, the intentions of both are material. Even if the parties had no common intention, the intentions of each may be proved, for the purpose of proving or negating that one intended to make a gift to the other.’

62 Similarly, Mason and Brennan JJ held [at 262]:

‘The Court of Appeal correctly took the time of the acquisition of the Baulkham Hills property as the material time for determining the beneficial interests of the parties. The evidentiary material from which the court might have drawn an inference as to the intention of the parties include their acts and declarations before or at the time of the purchase, or so immediately after it as to constitute a part of the transaction.’

63 Deane J held [at 269]:

‘In these circumstances, the starting point for the determination of the extent of the respective beneficial interests of Mr Calverley and Miss Green in the Baulkham Hills property was a presumption that the property was held upon resulting trust for them according to their respective contributions to the purchase price. That presumption could be rebutted or qualified by admissible evidence which indicated either that Miss Green was intended to have a full half beneficial interest in the property or that Mr Calverley was intended to have the whole beneficial interest.’

64 In the absence of any evidence of a contrary intention, the High Court found that the presumption in favour of a resulting trust prevailed, and the parties held their interests as joint tenants on trust for themselves as tenants in common, in shares equal to their respective contributions to the purchase price.

65 In the case of Jorge and Dana Daghero, the holding deposit of $1,000 was provided by Jorge Daghero. The balance of the purchase price in the sum of $339,150 was provided jointly by Jorge and Dana Daghero, who borrowed it jointly from the bank. It follows that Dana Daghero provided $169,075 of the purchase price, and Jorge Daghero provided $170,075. By operation of law, they are presumed to hold their interests on trust for themselves as tenants in common, in proportion to their respective contributions to the purchase price, unless a contrary intention is proven.

66 Their mutual intention is a question of fact. It is to be inferred from the arrangement which they made between themselves prior to purchase. Under that arrangement, Dana Daghero was to convey her share to Jorge Daghero when he discharged principal and interest on the loan.

67 That arrangement is evidence that neither party considered Ms Daghero to be the true owner of her share, but rather that both intended she should hold it on trust for her father. It positively establishes an intention from which a resulting trust is to be inferred in favour of Jorge Daghero, and rebuts the presumption that each intended to hold his or her share in trust for themselves as tenants in common in proportion to their contributions to the purchase price.

68 As the mutual intention of father and daughter is to be derived from their express arrangement, the presumption of a resulting trust cannot be displaced by any contrary presumption, such as a presumption of advancement by a father in favour of his child.

69 It follows that, as at the date of purchase, Dana Daghero held her share as joint tenant on resulting trust for her father.

70 It is next necessary to consider the effect of the severance of their joint tenancy in 2005. It is not entirely clear why the Applicants decided to sever the joint tenancy in the way that they did, rather than effect a transfer of the daughter’s interest to her father. It seems likely that it had something to do with legal advice – or a misapprehension as to its meaning – received around that time. Rightly or wrongly, Dana Daghero thought that she could not transfer her interest to her father without consideration. She refused to accept consideration, as she considered it inappropriate - as indeed it was, if she was a bare trustee of the legal estate. There followed a lengthy sequence of enquiries as to how she might transfer her interest without consideration, and – in all likelihood - without paying stamp duty. These inquiries culminated in the transfer of 2008.

71 Prior to the severance of the joint tenancy in 2005, Ms Daghero was trustee of the legal interest which she held in the Greystanes property. In 2005, she could not transfer any beneficial interest to herself as tenant in common, because she had none. The only person capable of transferring a beneficial interest to her was her father.

72 In the absence of contrary evidence, the presumption of advancement would apply to the effect that, when severing the joint tenancy, Jorge Daghero intended to transfer his beneficial interest, or part of it, to his daughter. Whether there was a contrary intention on his part is a question of fact.

73 In the circumstances of this case, there is contrary evidence as to his intention. The agreement that Dana Daghero would transfer her share to her father remained on foot. There was no evidence to suggest that the parties considered their agreement to have been varied or discharged by severance of the joint tenancy. That had occurred only to satisfy the father’s wishes with regard to making a will. The proper inference is that, despite severance of the joint tenancy, the parties continued to intend that Dana Daghero should ultimately transfer to her father whatever share she held. The fulfilment of this intention in 2008, without consideration, corroborates the evidence of its continued existence after the severance of the joint tenancy in 2005.

74 For those reasons, the Tribunal finds:

1) that it was not Jorge Daghero’s intention to transfer a beneficial interest to his daughter when he severed the joint tenancy in 2005, and

2) that Dana Daghero held her share as tenant in common on the same trust as she had held her interest as joint tenant – namely, on resulting trust for her father.

75 It follows that, prior to purchase of the unit at Parramatta, Dana Daghero neither held a relevant interest in residential property in New South Wales for the purposes of section 11(3) of the FirstHome Owner Grant Act 2000, nor owned residential property for the purposes of section 71 of the Duties Act 1997.

76 Accordingly, she was eligible for the First Home Owner Grant, and for exemption from stamp duty under the First Home Plus scheme.

Transfer of interest in Greystanes – whether dutiable

77 It is next necessary to consider the operation of section 55(1)(b) of the Duties Act 1997. That section provides that nominal duty is payable on a transfer of property ‘from an apparent purchaser to a real purchaser’ if (a) the property was vested in the apparent purchaser on trust for the real purchaser, and (b) the real purchaser ‘provided the money for the purchase’ and for any improvements made to the property after purchase.

78 In this case, there is no evidence of improvements made to the Greystanes property after purchase. The Tribunal has found that at all relevant times Dana Daghero held her interest in the Greystanes property – whether as joint tenant or tenant in common - on trust for her father.

79 It remains to determine whether Jorge and Dana Daghero were the ‘real purchaser’ and ‘apparent purchaser’ respectively for the purposes of section 55(1)(b). Similar, though by no means identical, provisions were considered by the Court of Appeal in Triantafilis v Commissioner of Stamp Duties (unreported, 28 April 1998), and by this Tribunal in Della-Franca & Anor v Chief Commissioner of State Revenue [2005] NSWADT 106. In the latter case, the learned President derived assistance from the following passage in the former by Priestley JA:

‘The provision [s 73(1)(e) of the Stamp Duties Act 1920 ] in my view is talking about one conveyance where the whole of the purchase money has been actually paid by the real purchaser although title has been taken to the property by an apparent purchaser. In my view a condition of non chargeability with ad valorem duty is that the whole of the purchase money for the one property conveyed by the instrument must have been actually paid by the real purchaser before the exemption from ad valorem duty is available.’

80 Section 55(3) provides, in effect, that where money is provided by a person other than the real purchaser, and that money was provided as a loan, it is taken to have been provided by the ‘real purchaser’ if the loan is repaid by that person.

81 In this case, the initial holding deposit of $1,000 was paid by Jorge Daghero. The balance of the purchase price was borrowed from the bank by Jorge and Dana Daghero jointly. If the purchase moneys were to that extent ‘provided as a loan’ within the meaning of that phrase in subsection 55(3), and repaid by Jorge Daghero alone, the balance of the purchase price would be taken to have been provided by him, and he would be taken to have provided all the money for the purchase in satisfaction of section 55(1)(b)(ii).

82 However, the evidence establishes that Jorge Daghero did not repay the entirety of the loan. The outstanding balance of the loan was satisfied with the proceeds of sale of the matrimonial home at Granville. That home was owned by Jorge Daghero and his wife. The loan was therefore repaid by both spouses.

83 It follows that, even if section 55(1)(b) was otherwise enlivened by the facts of this case, (a) the transfer of Dana Daghero’s interest in the Greystanes property to Jorge Daghero in 2008 did not attract an exemption from duty, and (b) the Commissioner’s decision to reassess it to duty was correct.

84 For the reasons given, the Tribunal determines the issues as follows.

1) At all relevant times, Dana Daghero held her interest in the Greystanes property – whether as joint tenant or tenant in common – in trust for Jorge Daghero.

2) Jorge Daghero did not provide the money for the purchase of the Greystanes property within the meaning of section 55(1)(b)(ii) of the Duties Act 1997 because, even though he provided the holding deposit of $1,000 and reimbursed Dana Daghero for repayments made from time to time, the loan moneys were ultimately repaid in part by his wife.

85 For those reasons:

1) Dana Daghero was eligible for the First Home Owner Grant, and for exemption from duty in respect of her purchase of a unit at Parramatta, and

2) the transfer of her interest in the Greystanes property to Jorge Daghero in 2008 was dutiable.

86 The Tribunal makes the following orders.

1) Pursuant to section 29 of the First Home Owner Grant Act 2000 , the decision of the Chief Commissioner to deny the First Home Owner Grant to Dana Daghero is reversed, and varied so as to provide that the grant be made in her favour.

2) Pursuant to section 101 of the Taxation Administration Act 1996 , the Chief Commissioner’s reassessment to duty of the transfer of Dana Daghero’s unit at Parramatta is revoked.

3) Pursuant to section 101 of the Taxation Administration Act 1996 , the decision of the Chief Commissioner to reassess the transfer of Dana Daghero’s interest in the Greystanes property to duty is confirmed.