Davey v Commissioner for ACT Revenue
[2008] ACTAAT 30
•6 November 2008
AUSTRALIAN CAPITAL TERRITORY
ADMINISTRATIVE APPEALS TRIBUNAL
CITATION:DAVEY AND COMMISSIONER FOR ACT REVENUE [2008] ACTAAT 30 (6 NOVEMBER 2008)
AT08/32
Catchwords: First home owner grant – review of decision requiring repayment of grant – whether applicant met conditions of residency requirements – issue of penalty imposed.
First Home Owner Grant Act 2000, ss 12, 21, 47, 48
Taskovski and Commissioner for ACT Revenue [2007] ACTAAT 11 (25 May 2007)
Tribunal:Mr B Hatch, Senior Member
Date:6 November 2008
AUSTRALIAN CAPITAL TERRITORY )
ADMINISTRATIVE APPEALS TRIBUNAL ) NO: AT08/32
GENERAL DIVISION )
RE: JOHN PATRICK
DAVEY
ApplicantAND: COMMISSIONER
FOR ACT REVENUE
Respondent
DECISION
Tribunal : Mr B Hatch, Senior Member
Date : 6 November 2008
Decision : The decision under review is affirmed.
…………………………..
Senior Member
AUSTRALIAN CAPITAL TERRITORY )
ADMINISTRATIVE APPEALS TRIBUNAL ) NO: AT08/32
GENERAL DIVISION )
RE: JOHN PATRICK
DAVEY
ApplicantAND: COMMISSIONER
FOR ACT REVENUE
Respondent
REASONS FOR DECISION
6 November 2008 Mr B Hatch, Senior Member
This is an application for review which was lodged on 15 February 2008 in relation to a decision of Ms C J Skelton, delegate of the Commissioner for ACT Revenue, dated 17 December 2007.
2. The decision under review of the delegate is in relation to a first home owner’s grant. The grant totalling $14,000 was paid on 7 January 2003 pursuant to the First Home Owner Grant Act 2000 (“FHOG Act”). The delegate made a decision that the applicant was not entitled to the grant because settlement of the property had not been completed prior to giving of the grant and therefore that the sum of $14,000 should be repaid. The delegate also imposed a penalty of 75% of the grant amount, that is, 75% of $14,000, pursuant to section 47 of the FHOG Act. Interest then accrues at the rate of 14.37% per annum until the amount is repaid in full.
Background
3. On 3 September 2001 the applicant applied for a grant under the First Home Owner Grant Scheme.
4. The delegate of the Commissioner approved the grant by way of letter dated 29 November 2001. It was a condition of the grant that if settlement did not proceed on 31 December 2002, then a further 20 days was allowed in which settlement could take place. If settlement did not take place within that period, then the grant of $14,000 was repayable.
5. It is not in dispute that settlement did not take place until 15 October 2004 some considerable time after 31 December 2002.
6. At the time of the grant and the approval of the grant, section 21 of the FHOG Act stated:
21 Conditions generally
(1)The commissioner may authorise the payment of a first home owner grant on conditions the commissioner considers appropriate.
(2)A condition imposed by the commissioner (under this section or any other provision of this Act) may require a person on whose application the first home owner grant is paid—
(a)to give notice of noncompliance with the condition within a period stated in the condition; and
(b) to repay the grant within a period stated in the condition.
(3)For a joint application, each applicant is individually liable to comply with a requirement under subsection (2) but compliance by any of them is to be regarded as compliance by all.
(4)If a first home owner grant is paid to a person on a condition imposed by the commissioner under this section or another provision of this Act, the person must comply with the condition.
Maximum penalty: 50 penalty units.
7. At the time the grant under the Act was made it was subject to the residence requirements under the FHOG Act. Section 12 at the time of the grant was as follows:
12 Criterion 5─Residence requirement
(1)An applicant for a first home owner grant must occupy the home to which the application relates as the applicant’s principal place of residence within 1 year after completion of the eligible transaction or a longer period approved by the commissioner.
(2)The commissioner may exempt an applicant (the noncomplying applicant) from the residence requirement if─
(a)the applicant is one of 2 or more joint applicants for a first home owner grant; and
(b)at least 1 of the applicants complies with the residence requirement; and
(c)there are, in the commissioner’s opinion, good reasons to exempt the noncomplying applicant from the residence requirement.
8. Thereafter the residence requirement was altered. It is not necessary for me to set out those residence requirements as I find that the residence requirement as set out above in section 12 at the time of the grant is the relevant residence requirement. The applicant was required to occupy the property as his principal place of residence within one year of settlement. As settlement occurred on 15 October 2004 then residence was meant to occur within one year of 15 October 2004.
9. Section 47 of the FHOG Act makes provision for payment of penalties and interest. Section 47 and section 48 state as follows:
47 Power to require repayment and impose penalty
(1)The commissioner may, by written notice, require an applicant (or former applicant) for a first home owner grant to repay an amount paid on the application if—
(a) the amount was paid in error; or
(b)the commissioner reverses the decision under which the amount was paid for any other reason.
(2)If, because of an applicant’s dishonesty, an amount is paid by way of a first home owner grant, the commissioner may, by the notice in which repayment is required or a separate notice, impose a penalty of not more than the amount the applicant is required to repay.
(3)If an applicant (or former applicant) for a first home owner grant fails to make a repayment required under this section or the conditions of the grant, the commissioner may, by written notice, impose a penalty of not more than the amount the applicant is required to repay.
(4)If an amount is paid in error on an application for a first home owner grant to a third party, the commissioner may, by written notice, require the third party to repay the amount to the commissioner.
48 Interest in relation to repayments
(1)A person is liable to pay interest under this section on the amount of a first home owner grant paid to the person if the amount is repayable under section 20 (2) (b).
(2)A person is liable to pay interest under this section on an amount paid to the person on an application for a first home owner grant if the amount is repayable under section 47.
(3) Interest under this section is to be calculated on a daily basis from—
(a)if the amount is repayable under section 20 (2) (b)—the relevant date as defined in section 20 (3); or
(b)if the amount is repayable under section 47 (1)—the date the amount was paid to the applicant.
(4)For this section, the interest rate is the interest rate mentioned in the Taxation Administration Act 1999, section 26.
10. When determining whether a penalty is to be imposed the considerations were set out by the President in Taskovski and Commissioner for ACT Revenue [2007] ACTAAT 11 (25 May 2007):
38. The power to impose a penalty is contained in section 47(2) and section 47(3) of the Act provided that the conditions contained within either of those provisions are met. The amount of the penalty in either case is, subject to the fixing of a maximum amount, within the discretion of the Commissioner. The exercise of the discretion is required to be made by reference to the subject matter, scope and purpose of the legislative scheme pursuant to which the decision-making power is to be exercised (Minister for Aboriginal Affairs v Peko-Wallsend Limited (1986) 162 CLR 24).
39. The adoption by the Commissioner of guidelines of the kind contained in the schedule referred to in paragraph 22 above is well recognised as a means of focussing the attention of a decision-maker on relevant considerations and better achieving consistency in decision-making provided that the guidelines are consistent with the statute conferring the decision-making power and do not fetter the proper exercise of the discretion conferred or prevent individual cases from being properly considered on their merits (Re Drake and Minister for Immigration & Ethnic Affairs (No 2) (1979) 2 ALD 634). As apparently mere departmental guidelines without legislative status, however, the schedule is relevant only as forming part of the background of facts of which the Tribunal ought to be informed when making its decision (Re Lumsden and Secretary, Department of Social Security (1986) 10 ALN N225). While acknowledged as sometimes necessary to the administration of a large department, the Tribunal should take a guarded approach to their application (Re MT and Secretary, Department of Social Security (1987) 11 ALD 440).
40. A list of the useful factors which a court might take into account in determining the amount of a civil penalty was developed by the Australian Law Reform Commission following an analysis of considerations adopted by the courts in imposing civil penalties under the Trade Practices Act and Company Law (See Principled Regulation: Federal and Civil Administrative Penalties in Australia (2002) ALRC 95). Those factors were adopted by the New South Wales Administrative Decisions Tribunal in considering the amount of penalty to be determined under the New South Wales equivalent provision to section 47 of the Act (see Calcaro v Commissioner for State Revenue [2004] NSWADT 158). Those factors, which I accept as appropriate, included:
(a) the deterrent effect of the penalty;
(b) the nature and extent of the contravention;
(c)any loss or damage suffered, or gain made, as a result of the contravention;
(d)the circumstances in which the contravention took place including the deliberateness of the conduct and the period over which it extended;
(e)whether professional advice had been obtained in relation to the contravention, prior to the breach;
(f)whether the person has previously been found by a court to have engaged in any related or similar conduct;
(g)the degree of cooperation with the authorities; and
(h)in the case of a natural person, the attitude of the offender.
11. During the hearing of this matter, the applicant gave evidence. The applicant began this matter by stating that he would not give evidence. He started by way of making submissions and thereafter gave sworn evidence. I had the opportunity of seeing the applicant give evidence both in chief and in cross-examination over three days due to his evidence being interrupted by the necessity for other witnesses to be called. Having seen the applicant and having heard his evidence, I do not regard the applicant as a witness of truth. Having seen and heard the applicant, I consider that he would have and probably did say anything at all which he considered would support his claim to keep the $14,000 and to obfuscate any issue which would assist the truth.
12. The applicant gave evidence that from about August 2004 he began to live at the property the subject of the grant as his principal place of residence. I do not accept that. The applicant’s sister was called to give evidence. The applicant’s sister, Susanne Davey, gave evidence that she visited the applicant at the subject property at various times during late 2004. Whether she attended at that property is not relevant to the view I formed which is that the applicant’s sister was either completely wrong in her assessment of where her brother lived or that she was not telling the truth. By way of example, Ms Susanne Davey gave evidence that she attended at the subject property to see her brother in August 2004 and helped him set up his wardrobes, and set up the house as a home. According to other evidence such as the electricity company there was no power to the property at that time. It seems unlikely that Ms Davey would overlook in her evidence that sort of fact. In conclusion, I do not accept what Ms Davey has to say.
13. Evidence was also given in support of the applicant by Mr Haswell. Mr Haswell gave evidence that he is an interior designer and designed the interior of the subject property. His evidence was that, in his experience, the nature of the interior decoration was not of a standard which would suggest that the property was to be rented, but was of a higher standard by which he would expect the owner to live in the property. He gave evidence that in August 2004 he recalled that he attended at the subject property and the applicant was living there and using a mattress in the bedroom as his bed. He also gave evidence that he had dinner with the applicant at the subject property on one occasion and on another occasion met the applicant at the subject property and had a drink with him there.
14. Once again as the evidence is that electricity was not connected to the subject property prior to September 2004 I cannot accept the evidence of Mr Haswell that he saw the applicant living there in August 2004. Living in such a property without electricity would have been something which someone would have remarked upon. This evidence also contradicts the evidence of Ms Davey that in August 2004 she helped her brother set up his house. I cannot accept that Ms Davey would not mention that this included her brother sleeping on a mattress on the floor.
15. The applicant gave evidence which at times was both extraordinary and audacious. In relation to why the money was not repaid when he went past the 20 days after the proposed settlement the applicant gave evidence that he spoke to a woman employed at the Commissioner’s office and that he was told that he need not be concerned and the Commissioner did not want the money repaid at that time. I do not accept that such a conversation took place. I do not accept the applicant’s evidence in relation to how the subject property ended up being leased. The applicant gave evidence that the first tenant was obtained through a real estate agent by the name of Kathy. It is difficult to know whether that evidence occurred to the applicant at the time he was giving it or whether he thought of it prior to taking his oath. The submission of the respondent was that this evidence should be disregarded as it had never been raised before in any way. The documents filed in this matter support the respondent’s submission that this evidence had never been raised before the hearing. I once again do not accept what the applicant has to say in this regard.
16. The respondent questioned the applicant in relation to his tax returns. The thrust of this seemed to focus on how the applicant was treating the subject property for the purposes of his income tax returns. It was being suggested by the respondent that the applicant may have been declaring to the Federal Commissioner of Taxation that the subject property was simply an investment property and therefore he was able to receive some beneficial tax treatment as a result. Such a tax return would have dealt a nasty blow to the prospects of the applicant in these proceedings. Of course, a tax return which showed the opposite would have assisted the applicant greatly in showing that the property was simply a place which he always intended calling home. Counsel for the respondent asked the applicant squarely whether he was prepared to get those tax returns and tender them in evidence. The applicant refused to do that. I conclude that the tax returns would not have assisted the applicant’s case.
17. The evidence of the applicant was that in 2004 he intended moving into the subject property and he in fact did so for approximately 49 days. That however coincided with a period during which he had disputes with his business partners. This caused considerable disruption to his business together with the need to raise funds to buy out one of his business partners. I accept the evidence of the applicant that he had considerable business difficulties during that time because this evidence is supported by other evidence, notably a restraining order issued by the Magistrates Court involving the applicant and his business partner. I do not accept that he moved into the subject property as his principal place of residence. I do not accept that he thereafter had to move out in order to be able to rent out the property so that he could afford to pay out his business partner. I consider that the business dispute has become a convenient backdrop to help explain why the subject property was never his principal place of residence.
18. Having heard all of the evidence in this matter, I affirm the decision under review. I do not do this easily as it may have been open to me to determine that the penalty should have been 100% of the grant rather than 75%. There is some merit, however, in bringing this matter to resolution by affirming the decision rather than interfering with it.
FORM 33
PUBLICATION DETAILS
TO BE PUBLISHED
To be completed by Member's Staff
________________________________________________________________________
PART A FILE NO: AT08/32
APPLICANT: JOHN PATRICK DAVEY
RESPONDENT: COMMISSIONER FOR ACT REVENUE
PARTY JOINED: N/A
COUNSEL APPEARING: APPLICANT: SELF
RESPONDENT: MR K ARCHER
PARTY JOINED:
SOLICITORS: APPLICANT:
RESPONDENT: ACT GOVERNMENT
SOLICITOR
PARTY JOINED:
OTHER:APPLICANT:
RESPONDENT:
PARTY JOINED:
TRIBUNAL MEMBER/S: MR B HATCH, SENIOR MEMBER
DATE/S OF HEARING: 23, 29-31 JULY 2008 PLACE: CANBERRA
DATE OF DECISION: 6 NOVEMBER 2008 PLACE: CANBERRA
_______________________________________________________________________
PART B
RECOMMENDATION:
FULL REPORT ( ) CASE NOTE ( ) UNREPORTED DECISION (X)
COMMENT:
3
3
0