Fiegert and Edwards-v-Chief Commissioner, Office of State Revenue

[2001] NSWADT 177

CITATION:	Fiegert and Edwards-v-Chief Commissioner, Office of State Revenue [2001] NSWADT 177
DIVISION:	General Division
PARTIES:	APPLICANTS Serena Fiegert David Edwards RESPONDENT Chief Commissioner, Office of State Revenue
FILE NUMBER:	013115
HEARING DATES:	02/08/2001
SUBMISSIONS CLOSED:	08/23/2001
DATE OF DECISION:	10/26/2001
BEFORE:	Hennessy N (Deputy President)
APPLICATION:	first home owners grant - approval of application - First Home Owners Grant Act - first home owners grant - approval of application
MATTER FOR DECISION:	Principal matter
LEGISLATION CITED:	First Home Owners Grant Act 2000 Interpretation Act 1987
CASES CITED:	Project Blue Sky v ABA [1998] 194 CLR 355 Tasker v Fullwood [1978] 1 NSWLR 20 Timbarra Protection Coalition Inc v Ross Mining NL & Ors [1999] NSWCA 8 Ex parte Redgrave; Re Bennett (1946) 46 SR (NSW) Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28
REPRESENTATION:	APPLICANTS In person RESPONDENT I Mescher, barrister
ORDERS:	The Chief Commissioner’s decision not to approve the applicants application for a First Home Owners Grant is affirmed.

Introduction
1 On 10 May 2001 Ms Fiegert and Mr Edwards lodged an application with the Tribunal requesting a review of a decision of the Chief Commissioner, Office of State Revenue (Chief Commissioner). The decision was not to approve their application under the First Home Owner Grant Scheme (FHOGS). The Chief Commissioner refused the applicants’ application because they have a “relevant interest” in land. That interest is a 1/4027 share as tenant-in-common of a property in Boambee Bay Resort (the property). The applicants wrote to the Commissioner on 16 March 2001. They said in that letter that the “relevant interest”:
. . . happens to be a week of timeshare I bought 13 years ago at Boambee Bay Resort, Coffs Harbour. Its a holiday - my family and I get a weeks holiday there every year. With the weeks holiday comes a share in the land of the resort. Therefore, I have a title deed to a 1/4027th share in 6 ½ acres. The present value of my time share is about $3,000.

2 On 30 August 2000, the applicants’ solicitors wrote to the Chief Commissioner objecting to that decision and enclosing a copy of the relevant title deed and share certificate.

Relevant legislation

3 The First Home Owner Grant Act 2000 (the Act) requires that an applicant complies with the eligibility criteria. Section 7(1)(a) states that:
1) A first home owner grant is payable on an application under this Act if:
(a) the applicant or, if there are 2 or more of them, each of the applicants complies with the eligibility criteria, and
(b) the transaction for which the grant is sought:
(i) is an eligible transaction, and
(ii) has been completed.
(2) Despite subsection (1) (a), an applicant need not comply with the eligibility criteria to the extent the applicant is exempted from compliance by section 9 (2) or 12 (2) or both.
(3) Despite subsection (1) (b), a first home owner grant is payable before completion of the relevant eligible transaction, as authorised by section 20.
(4) Only one first home owner grant is payable for the same eligible transaction.

4 The exemptions in s 9(2) and s 12(2) relate to residency and citizenship and do not apply to the circumstances of this case.

5 Some of the relevant eligibility criteria are set out in s 11(1)(a) and (b) in the following terms:
An applicant for a first home owner grant is ineligible for the grant if the applicant or the applicant's spouse has, before 1 July 2000, held:

(a) a relevant interest in residential property in New South Wales, or
(b) an interest in residential property in another State or a Territory that is a relevant interest under the corresponding law of that State or Territory.

(2) In working out for the purposes of subsection (1) whether an applicant held a relevant interest (within the meaning of this Act or a corresponding law) in residential property at a particular time, any deferment of the applicant's right of occupation (because the property was subject to a lease) is to be disregarded.

(3) An applicant is ineligible if the applicant or the applicant's spouse has, on or after 1 July 2000 and before the date on which the application is made, held an interest in property (other than property to which the application relates) used at any time on or after 1 July 2000 as the residence of the applicant or the applicant's spouse, being:

(a) a relevant interest in residential property in New South Wales, or
(b) an interest in residential property in another State or a Territory that is a relevant interest under the corresponding law of that State or Territory.

6 A relevant interest is defined in s 5(2) of the Act to include an estate in fee simple in the land.

7 It is not in dispute that one of the applicants, Ms Fiegert, held a relevant interest in the property shown on the Certificate of Title, prior to 1 July 2000, namely 1/4027 interest in the property. That interest gave her the right to spend a week every year holidaying at the property.

8 Section 17 of the Act requires the Chief Commissioner to pay the grant if he or she is satisfied that a grant is payable.
(1) If the Chief Commissioner is satisfied that a first home owner grant is payable on an application, the Chief Commissioner must authorise the payment of the grant.

9 There is provision in the Act for an applicant to object to the Chief Commissioner’s decision if he or she is dissatisfied with that decision: s 25.

10 Section 26 allows the Chief Commissioner to allow or disallow the objection. That section sates that:
After considering an objection, the Chief Commissioner may:

(a) allow the objection in whole or in part or may disallow the objection, and
(b) accordingly reverse, vary or confirm the decision (the original decision) to which the objection was made.

Issue

11 The issue in this case is whether the Chief Commissioner can allow the objection and give the applicants the grant even though they do not meet one of the eligibility criterion set out in the legislation.

Submissions

12 On one view, because s 26 uses the word “may” it could be argued that the Chief Commissioner has an unfettered discretion to allow or disallow an objection. It should be assumed, in accordance with s 9 of the Interpretation Act 1987, that when “may” is used it gives the administrator a discretion, whereas when “must” is used, no such discretion is conferred. Section 9 states that:
1) In any Act or instrument, the word "may", if used to confer a power, indicates that the power may be exercised or not, at discretion.
(2) In any Act or instrument, the word "shall", if used to impose a duty, indicates that the duty must be performed.

13 The Chief Commissioner’s submission was that this is not the correct interpretation of s 26. His submission was that s 26 must be interpreted taking into account the purpose of the legislation. One of those purposes is to provide the grant to people who meet the eligibility criteria. The discretion vested in the Commissioner under s 26 still has considerable scope for application where, for example, a statutory discretion has been exercised erroneously or the Commissioner has simply made a mistake about whether an applicant meets one or more of the eligibility criteria.

Decision and reasons

14 Consistently with s 9 of the Interpretation Act 1987 , the use of the word “may” in s 26 indicates that the Commissioner has a power to allow or disallow an objection. Because mandatory eligibility requirements are set out under s 7 and s 8 to 13A of the Act, the question arises as to whether those requirements must be fulfilled before the Commissioner can exercise the discretion under s 26. If the eligibility requirements are what is known as “jurisdictional facts” or “conditions precedent” to the exercise of the Chief Commissioner’s discretion, then an exercise of that discretion when those requirements have not been met, will mean that a decision to allow the objection will be invalid ( Project Blue Sky v ABA [1998] 194 CLR 355).

15 In determining the validity of an act done in breach of a condition precedent, the focus is on the construction of the statute itself (Tasker v Fullwood [1978] 1 NSWLR 20). In Timbarra Protection Coalition Inc v Ross Mining NL & Ors [1999] NSWCA 8 (9 February 1999), Spigelman CJ, Mason P and Meagher JA said at [38] that:
The issue of jurisdictional fact turns, and turns only, on the proper construction of the Statute. (See e.g. Ex parte Redgrave; Re Bennett (1946) 46 SR (NSW) 122, 125). The Parliament can make any fact a jurisdictional fact, in the relevant sense: that it must exist in fact (`objectivity') and that the legislature intends that the absence or presence of the fact will invalidate action under the statute (`essentiality'). (Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28 at [91]-[93]).

16 These cases provide the framework for determining whether the eligibility criteria constitute a jurisdictional fact or a matter incidental to the exercise of the Commissioner’s discretion. In particular, three matters are relevant: the language of the statute, its subject matter and objects, and the consequences for the parties of holding void every act done in breach of the condition.

17 The language of s 26 when viewed in isolation, suggests that the Chief Commissioner has an unfettered discretion to allow or disallow an objection. No conditions are attached to the exercise of that power in s 26 or elsewhere in the Act. However, when looking at the language of s 7 and s 8 to 13A, it is clear that the eligibility criteria must be met before a person is entitled to the grant. Under s 7 the grant is payable if certain conditions are met. Section 11 states that a person is ineligible for the grant if certain conditions are met, for example that the applicant held a relevant interest in residential property before 1 July 2000.

18 The scope and purpose of the Act supports this view. The long title of the Act is:
An Act to encourage and assist home ownership, and to offset the effect of the Goods and Services Tax on the acquisition of a first home, by establishing a scheme for the payment of grants to first home owners; to amend the Stamp Duties Act 1920 to exempt such grants from financial institutions duty; and for other purposes.

19 The Act “establishes a scheme for the payment of grants to first home owners.” That scheme includes specific eligibility criteria. It would not be in accordance with the purpose of the Act to give people the grant when they had not met those criteria.

20 The consequences for the parties of characterising the eligibility criteria as jurisdictional facts or conditions precedent to the exercise of the Commissioner’s discretion under s 26 is that they will not receive the grant when they have not meet those criteria. While this outcome may be harsh in certain individual cases, the language and intention of the Act is clear.

21 There is some scope for the Commissioner to exercise the discretion under s 26 for example where the Commissioner has made a mistake about the whether an applicant meets one or more of the eligibility criteria. Further evidence may be presented which satisfies the Commissioner that the criteria have been met and an objection may be upheld.

22 I can appreciate that the applicants feel that they have been treated unfairly in being denied the grant. The interest in land which disqualified them from receiving the grant is extremely small. Parliament could have made provision for the grant to made is such a cases, but they did not do so. Although the applicants have requested that “common sense prevail”, the Tribunal’s role is to apply the legislation as enacted by parliament. My interpretation of that legislation is that the applicants are not eligible for the grant and that eligibility is a condition precedent to the Commissioner exercising the discretion under s 26. In those circumstances, the Tribunal has no choice but to affirm the Commissioner’s decision not to give the grant to the applicants.

Orders

23 The Chief Commissioner’s decision not to approve the applicants application for a First Home Owners Grant is affirmed.