Hammond v Commissioner for Act Revenue

[2015] ACAT 12

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

HAMMOND v COMMISSIONER FOR ACT REVENUE

(Administrative Review) [2015] ACAT 12

AT 14/31 and AT 14/32

Catchwords:             ADMINISTRATIVE REVIEW -  eligibility for first home owner grant – statutory interpretation - place of residence – extrinsic materials as guide to construction – when ordinary meaning should be departed from – legislative context and history – judicial construction

Legislation:ACT Civil and Administrative Tribunal Act 2008 s 68

Duties Act 1999

First Home Owner Grant Act 2000, Long Title,
ss 4, 12, 12B, 13
First Home Owner Grant Amendment Act 2013
Legislation Act 2001, s138, 139, 140, 141
Taxation Administration Act 1999, ss 108A, 111
A New Tax System (Goods and Services Tax) Act 1999 (Cth), s195-1

Subordinate

Legislation:Taxation Administration (Amounts Payable – Eligibility – New and Substantially Renovated Homes and Land Only – Home Buyer Concession Scheme) Determination 2013 (No 2) DI2013-227, ss 4, 8

The Territory Plan

Cases:Bacon v Salamane (1965) 112 CLR 85

Cooper Brookes (Wollongong) Pty Ltd v FCT (1981) 147 CLR 297
Dugan v Mirror Newspapers Ltd [1978] HCA 54
Fincher, John v Commissioner for ACT Revenue [1996] ACTAAT 134

Flaherty v Girgis (1987) 162 CLR 574

Foots v Southern Cross Mine Management Pty Ltd [2007] HCA 56
Haureliuk v Furler [2012] ACTCA 11
Hedley Commercial Property Services P/L v BRCP Oasis Land P/L [2009] QCA 231
Kozman v Chief Commissioner of State Revenue [2013] NSWADT 143
Leichhardt Council v RTA (2006) 149 LGERA 439
McTackett v Chief Commissioner of State Revenue [2003] NSWADT 154
Marana Holdings Pty Ltd v Commissioner of Taxation [2004] FCAFC 307
Nairn v Chief Commissioner of State Revenue [2011] NSWADT 41
R v Jackson [2005] SASC 472
Re Alcan Australia Limited: Ex Parte Federation of Industrial Manufacturing & Engineering Employees [1994] HCA 34
Re Islam (2010) 4 ACTLR 235
Sons of Gwalia Ltd v Margaretic [2007] HCA 1
Tuggeranong Town Centre v Commissioner for ACT Revenue [2010] ACAT 29
Wacando v Commonwealth [1981] HCA 60
Zakariya v Chief Commissioner Office of State Revenue [2003] NSWADT 26
Zappala Family Co Pty Ltd v Brisbane City Council & Ors; Brisbane City Council v Zappala Family Co Pty Ltd & Ors  [2014] QCA 147

Text/Papers:             Explanatory Statement to First Home Owner Grant Amendment Bill 2013

Explanatory Statement to Taxation Administration (Amounts Payable –Eligibility – New and Substantially Renovated Homes and Land Only – Home Buyer Concession Scheme) Determination 2013 (No 2) DI2013-227
Extract from Hansard, presentation speech of the First Home Owner Grant Amendment Act 2013, 6 June 2013, pp 2364-2365
ACT Tax Reform Fact Sheet - Home Buyer Concession Scheme

Statutory Interpretation in Australia Pearce & Geddes (8^th ed, 2014)

The Macquarie Concise Dictionary

Shorter Oxford English Dictionary

Tribunal:                  Dr T. Foley – Senior Member

Date of Orders:  5 February 2015
Date of Reasons for Decision:         5 February 2015

AUSTRALIAN CAPITAL TERRITORY            )
CIVIL & ADMINISTRATIVE TRIBUNAL       )          AT 14/31 and AT 14/32

BETWEEN:

FELICITY HAMMOND

Applicant

AND:COMMISSIONER FOR ACT REVENUE

Respondent

TRIBUNAL:            Dr T. Foley – Senior Member

DATE:  5 February 2015

ORDER

1. The decisions under review are set aside and substituted with decisions allowing the objections.

2. To remove doubt, the applicant’s first home owner grant application and home buyer concession application are granted.

………………………………..
Dr T. Foley

Senior Member

REASONS FOR DECISION

1.Felicity Hammond (“the applicant”) has sought review of two decisions of the Commissioner for ACT Revenue (“the respondent”) disallowing objections 3443 and 3446. Those objections were made in respect of decisions to refuse her application for a grant under the First Home Owner Grant (“the FHOG”) scheme and a duty concession under the Home Buyer Concession (“the HBC”) scheme with respect to her purchase of block 21 section 23 unit 18, number 2 being one of a number of units at 2 Cunningham Street Griffith in the ACT ("the property"). The two applications were heard together.

2.Jurisdiction to review the respondent’s decisions is conferred on the Tribunal by section 108A of the Taxation Administration Act 1999.

3.Section 68 of the ACT Civil and Administrative Tribunal Act 2008 (“the ACAT Act”) deals with review of decisions.  It provides:

68Review of decisions

(1)This section applies if the tribunal reviews a decision by an entity.

(2)The tribunal may exercise any function given by an Act to the entity for making the decision.

NoteA reference to an Act includes a reference to the statutory instruments made or in force under the Act, including regulations (see Legislation Act, s 104).

(3)The tribunal must, by order—

(a)confirm the decision; or

(b)vary the decision; or

(c)set aside the decision and—

(i)make a substitute decision; or

(ii)remit the matter that is the subject of the decision for reconsideration by the decision-maker in accordance with any direction or recommendation of the tribunal.

The Hearing

4.The matter was heard on 24 October 2014. The Tribunal had before it documents provided by the respondent on which its two decisions were based (“the T Documents”), the Submissions and Statements of Facts and Contentions of the parties, witness statements and other exhibits tendered in evidence.  The applicant appeared in person and the respondent was represented by Dr D. Jarvis.

5.The applicant called no oral evidence. Evidence for the respondent was given by Ms A. Kaucz.

History

6.On 6 November 2013 the applicant entered into a contract for the purchase of the property. The applicant was a first home owner and the purchase was dutiable property under the Duties Act 1999 (“the Duties Act”).

7.Prior to the sale of the property, the owner and vendor to the applicant had, since its construction in 2006, provided short-term tenancies over the property to various persons as a ‘serviced apartment’.

8.On 13 November 2013 the applicant paid assessed stamp duty of $16,875.

9.On 2 December 2013 the applicant submitted a HBC application.

10.On 6 December 2013 the transfer of the property settled and the applicant moved in.

11.On 17 December 2013 the applicant submitted a FHOG application.

12.On 19 December 2013 the respondent refused the applicant's HBC application.

13.On 23 December 2013 the respondent refused the applicant's FHOG application.

14.On 28 January 2014 the applicant lodged objections 3443 and 3446 to the refusal of both applications.

15.On 2 May 2014 the respondent disallowed both objections.

16.On 23 May 2014 the applicant lodged two Applications for Review of a Decision, AT14/31 with respect to objection 3446 relating to the HBC application and AT14/32 with respect to objection 3443 relating to the FHOG application.

17.The question for determination is whether the purchase is of a “new home” and whether the applicant therefore qualifies for a FHOG and a HBC as a consequence.

The relevant law

18.The First Home Owner Grant Act 2000 (“FHOG Act”) provides a scheme for the payment of grants to first home owners.  The purpose of the Act is stated in its long title as:

An Act to encourage and assist home ownership, and to offset the effect of the GST on the acquisition of a first home, by establishing a scheme for the payment of grants to first home owners.

19.This stated purpose remains but the FHOG scheme was retargeted from 1 September 2013 to restrict entitlement to the grant to the purchase of new and substantially renovated homes only. 

20.The grant is payable to an eligible applicant (which the respondent has accepted the applicant is) for the purchase of a home in the ACT where the purchase is an eligible transaction (which is the subject of dispute). Section 13 defines the meaning of an eligible transaction:

13Meaning of eligible transaction etc

(1)An eligible transaction is—

(a)a contract for the purchase of a new home in the ACT made on or after 1 September 2013; or

(b)a comprehensive home building contract made on or after 1 September 2013 by the owner of land in the ACT, or a person who will on completion of the contract be the owner of land in the ACT, to have a new home built on the land; or

(c)the building of a new home in the ACT by an owner-builder if the building work begins on or after 1 September 2013.

21.Section 12B provides the definition of “new home”:

12BMeaning of new home—div 2.3

(1)For this division, a new home is a home that has not been previously occupied or sold as a place of residence, and includes a substantially renovated home.

(2)For this section:

substantially renovated home means a home that—

(a)has substantial renovations; and

(b)as renovated, has not previously been occupied or sold as a place of residence.

substantial renovations, of a home, means renovations in which all, or a substantial part, of the home is removed or replaced.

22.The Duties Act imposes duty on a transfer of dutiable property assessed at its dutiable value. Parts 2.5 and 2.6 of the Act provides for concessions and exemptions from duty. The HBC is one such concession, providing for the payment of a concessional rate of duty for an eligible home buyer if certain eligibility provisions are met. In the case of the applicant’s purchase, the relevant eligibility provisions are set out in the Taxation Administration (Amounts Payable –Eligibility – New and Substantially Renovated Homes and Land Only – Home Buyer Concession Scheme) Determination 2013 (No 2) DI2013-227 (“the HBC Instrument”).

23.Relevantly, section 8 of the HBC instrument provides for the payment of a “determined amount of duty [i.e. a reduced amount]… on the purchase of an eligible property”.

24.Section 4 provides relevant definitions of “eligible property” and “new home” and “substantially renovated home”:

4Definitions

In this instrument:

…

1.Eligible property means an estate in fee simple or a Crown lease that—

a.has a dwelling upon it that is a new home or a substantially renovated home, or is subject to an ‘off the plan’ purchase agreement as defined in Section 16A of the Duties Act 1999; and

b.has a dutiable value less than the upper threshold.

1.New home means a dwelling that has not previously been occupied or sold as a place of residence.

…

1.Substantially renovated home means a home that:

a.has substantial renovations; and

b.as renovated, has not been previously occupied or sold as a place of residence.

25.The interpretation of the definition of the term “new home” in the FHOG Act and the HBC Instrument is at issue. Part 14.2 of the Legislation Act 2001 (“the Legislation Act”) sets out key principles for working out the meaning of an Act where that meaning is in dispute.

Part 14.2Key principles of interpretation

138Meaning of working out the meaning of an Act—pt 14.2

In this part:

working out the meaning of an Act means—

(a)resolving an ambiguous or obscure provision of the Act; or

(b)confirming or displacing the apparent meaning of the Act; or

(c)finding the meaning of the Act when its apparent meaning leads to a result that is manifestly absurd or is unreasonable; or

(d)finding the meaning of the Act in any other case.

139Interpretation best achieving Act’s purpose

(1)In working out the meaning of an Act, the interpretation that would best achieve the purpose of the Act is to be preferred to any other interpretation.

(2)This section applies whether or not the Act’s purpose is expressly stated in the Act.

NoteThe Human Rights Act 2004, s 30 (1) (which is about interpreting legislation to be consistent with human rights) is also relevant to interpreting territory laws.

140Legislative context

In working out the meaning of an Act, the provisions of the Act must be read in the context of the Act as a whole.

Examples

1     The long title of an Act provides that it is an Act to give certain benefits to the holders of pensioner cards.  Section 4 provides ‘This Act applies to a holder of a pensioner card’.  Section 22 provides that the commissioner may grant ‘a person’ an exemption from payment of rates.  The Act does not contain a definition of ‘person’.  Section 22 must be read in the context of the Act as a whole so that the commissioner may only grant exemptions to people who are holders of pensioner cards.

2     The Drug Testing Regulation 2001 (made under the Drug Testing Act 2000 (hypothetical)), s 6 contains the following heading:

6      Corresponding law—Act, s 100, def corresponding law

The heading indicates that the section has been made for the definition of corresponding law in the Drug Testing Act 2000, s 100.

3     Section 12 (1) of a subordinate law refers to ‘a non-conviction order under the Crimes (Sentencing) Act 2005’.  No other kind of order is mentioned in the section and the word ‘order’ is not otherwise defined in the subordinate law.  Subsections (2), (4), (7) and (9) of the same section, which only refer to ‘the order’, are to be understood as referring to the order mentioned in s (1).

Note 1See s 126 and s 127 for material that is, or is not, part of an Act or statutory instrument.

Note 2An example is part of the Act, is not exhaustive and may extend, but does not limit, the meaning of the provision in which it appears (see s 126 and s 132).

141Non-legislative context generally

(1)In working out the meaning of an Act, material not forming part of the Act may be considered.

Note 1See s 146 for the meaning of may and must.

Note 2See s 126 and s 127 for material that is, or is not, part of an Act or statutory instrument.

Note 3See s 142 for material that may be considered in working out the meaning of an Act or statutory instrument.

(2)In deciding whether material not forming part of an Act should be considered in working out the meaning of the Act, and the weight to be given to the material, the following matters must be taken into account:

(a)the desirability of being able to rely on the ordinary meaning of the Act, having regard to the purpose of the Act and the provisions of the Act read in the context of the Act as a whole;

(b)the undesirability of prolonging proceedings without compensating advantage;

(c)the accessibility of the material to the public.

(3)Subsection (2) does not limit the matters that may be taken into account.

(4)For subsection (2) (c), material in the register is taken to be accessible to the public.

The matter at issue

26.At issue is the meaning of “residence” in the phrase “not been previously occupied or sold as a place of residence” in the FHOG Act, or in the slightly different ordering of the words as “not previously been occupied or sold as a place of residence” in the HBC instrument. Neither the word “residence” nor the phrase “occupied or sold as a place of residence" are defined in either instrument. The question is whether the property the applicant purchased, being a serviced apartment, had been “previously occupied or sold as a place of residence”.

The evidence

27.Apart from oral evidence from one witness, Ms A. Kaucz, the evidence before the Tribunal consisted of the material contained in the T documents and exhibits.

The evidence of Alexandra Kaucz

28.Ms Kaucz gave evidence on behalf of the respondent. Ms Kaucz is manager of the Territory Plan Section of the Environment and Sustainable Directorate. She is responsible for giving advice on the policy content of, and definitions in, the Territory Plan. Her evidence was that the Territory Plan defines a “serviced apartment” as “an apartment that is used as a commercial accommodation unit” and that “a commercial accommodation unit” in its turn is defined as “a room or suite of rooms that is made available on a commercial basis for short-term accommodation” (Ex R2, para 3). Her evidence was that such a serviced apartment would include facilities such as cooking facilities, separate bathroom and often separate areas of living space. It would be uncommon for it not to have a laundry. A serviced apartment would additionally have a level of services attached to its use such as a cleaning service and in some instances a lobby service. She agreed that in the Territory Plan the category of use as “commercial accommodation unit” is separate and distinct from the category of use as “residential use”.

The applicant's submissions on interpretation

29.The applicant contends, and it was not in issue in the proceedings, that since its original construction in 2006 the property had been used as a serviced apartment in a complex of serviced apartments. Evidence provided by the owner and vendor to the applicant (Ex A1 Attachment B) was that these apartments had “never been used as a permanent place of residence”.  As a serviced apartment, the property was used to provide commercial temporary accommodation for guests. The apartment was fully furnished and services such as cleaning were provided to guests.

30.The applicant contends that what flows from this is that the property had not, prior to her purchase, been occupied or sold as a “place of residence” and as such is a “new home” within the definitions provided in the FHOG Act and the HBC Instrument.

31.The applicant submitted that in the absence of a definition of “residence” or “place of residence” in these statutory provisions, the starting point for interpreting their meaning is the ordinary meaning of the words having regard to the context in which they are used and the legislative purpose of the relevant instruments in which they appear.

32.As to the ordinary meaning, the Shorter Oxford English Dictionary defines “residence” as “the circumstances or fact of having one’s permanent or usual abode in or at a certain place; the fact of residing or being resident…”. The Macquarie Concise Dictionary defines “residence” as “the place, especially a home in which one resides; dwelling place; dwelling” and “reside” as “to dwell permanently or for a considerable time; have one's abode for a time”.

33.The applicant contends that the ordinary meaning of “place of residence” requires a permanent or long-term commitment to the occupation of the premises as the occupant’s usual abode.

34.The applicant further contends that when interpreting the meaning of a word or phrase, relevant case law in which the word or phrase has been judicially construed must be taken into account, citing as authority the High Court in Re Alcan Australia Limited; Ex Parte Federation of Industrial Manufacturing & Engineering Employees [1] ("Alcan") to the effect that “ [t]here is abundant authority for the proposition that where the Parliament repeats words which have been judicially construed, it is taken to have intended the words to bear the meaning already ‘judicially attributed to (them)’ ” (citations omitted).

[1] [1994] HCA 34 at [20]

35.The meaning of the term “residence” and the phrase “occupied as a residence” were construed by the Full Federal Court in Marana Holdings Pty Ltd v Commissioner of Taxation[2] (“Marana Holdings”) in relation to the A New Tax System (Goods and Services Tax) Act 1999 (Cth) (“the GST Act”). The court considered a series of dictionary references to “reside” and “residence” concluding at [26] that “clearly, both “reside” and “residence” have the connotation of permanent, or at least long-term commitment to dwelling in a particular place”. The court decided, given this meaning attributed to “residence” of “involving a degree of permanent or long-term commitment to the occupation of the premises”, that a motel unit which was subsequently sold as an apartment had not been “occupied as a residence”[3].

[2] [2004] FCAFC 307

[3] at [60]

36.The applicant contended it was significant that following the decision in Marana Holdings the definition of "residential premises" in section 195-1 of the GST Act was amended to insert the additional phrase "regardless of the term of occupation or intended occupation". The applicant submits this amendment was a recognition that "residence" or "residential" in its accepted judicial meaning connoted permanent occupation and the amendment was made to that Act to remove the requirement for permanence.

37.The applicant submits that this amendment to the GST Act was made before the subsequent changes to the FHOG Act and the HBC Instrument to target these instruments to the purchase of "new homes" only. The applicant submits that nonetheless, the ACT Government did not seek to add the same additional words "regardless of the term of occupation or intended occupation" to those instruments so as to remove from the term "place of residence" the quality of permanence flowing from its ordinary meaning as judicially interpreted. The applicant contends that as such, it was not the intention of the ACT legislature to include places that were occupied on a temporary or transient basis, such as is the case with serviced apartments, within the meaning of "occupied as a place of residence" for these provisions.

38.The decision in Marana Holdings was affirmed by the Supreme Court of Queensland (Court of Appeal) in Hedley Commercial Property Services P/L v BRCP Oasis Land P/L[4]. The court held[5] that given “there is no definition of “residence” or “residential” in [relevant legislation…][t]he word must be given its ordinary meaning and connotation which…requires the occupant of the premises in question to live in them over a substantial period. The occupation must be ‘permanent or long-term’”.

[4] [2009] QCA 231

[5] at [32]

39.The decision was further upheld in Zappala Family Co Pty Ltd v Brisbane City Council & Ors; Brisbane City Council v Zappala Family Co Pty Ltd & Ors  [6] (“Zappala”) where the Supreme Court of Queensland (Court of Appeal) considered whether “hotel” was a non-residential use. The court noted[7] “that the term ‘residential’ has the connation of long term or permanent residence has long been accepted” and found[8] that “[t]he hotel room accommodation does not fit within the established meaning of residential use. It is designed for temporary accommodation. The same is the case for the accommodation entailed within ‘Short Term Accommodation’ which, by its definition, is the opposite of residential use”.

[6] [2014] QCA 147

[7] at [78]

[8] at [81]

40.The applicant contends on the basis of this authority that the finding in R v Jackson [9] (“Jackson”) relied on by the respondent in its FHOG and HBC Reasons Statements[10]  that “[p]remises may be a place of residence even if the occupation is for a short period of time” is distinguishable. The applicant contends that Jackson is distinguishable both because its factual matrix was concerned with the criminal trespass of premises which were not tenanted at the time rather than with revenue issues, and because the relevant legislation included a specific definition of “residence” which was in broad terms, which is not the case with the FHOG Act or the HBC Instrument.

[9] [2005] SASC 472 at [23]

[10] AT14/31, T13-20; AT14/32, T10-17

41.The applicant further contends that it is only if, when interpreting the meaning of a word or phrase, its ordinary meaning in its context and having regard to judicial interpretation cannot be construed with sufficient clarity that extrinsic material can then be taken into account to determine that meaning. The applicant relies on the decision of the ACT Court of Appeal in Haureliuk v Furler[11] (“Haureliuk”) in this regard to the effect that “[a] statement of intent in the extrinsic material cannot supply the omission by the draftsperson when the result cannot reasonably be deduced from the words actually used”.  The applicant contends that in this instance there is no reason to displace the ordinary meaning of the phrase “occupied as a place of residence” as that meaning is clear on its face and in its context.

[11] [2012] ACTCA 11 at [30]

42.The applicant contends with respect to extrinsic material that the presentation speech of the First Home Owner Grant Amendment Act 2013[12] reaffirms the key purpose of the FHOG Act remaining at to assist “first homebuyers…during the exciting time of purchasing their first home”. The purchase of the property by the applicant is the purchase of her first home. Therefore in the applicant’s submission that object is achieved by granting the FHOG and the HBC to her in relation to the purchase.

[12] Ex R1 Tab 7

The respondent’s submissions on interpretation

43.The respondent submits with respect to the interpretation of statutory words and phrases, that the starting point is the text and the context of their use. “Working out the meaning of an Act” may involve displacing an apparent meaning or resolving an ambiguity (section 138, Legislation Act).

44.Following this approach the respondent submits the starting point in interpreting the meaning of the phrase “occupied as a place of residence” is the legislative provision and its history citing Cooper Brookes (Wollongong) Pty Ltd v FCT [13](“Cooper Brookes”); Dugan v Mirror Newspapers Ltd[14] (“Dugan”); Wacando v Commonwealth [15] and Sons of Gwalia Ltd v Margaretic [16]as authority. In the case of the FHOG Act the respondent contends it is necessary to look at the Act before and after its 31 August 2013 amendment. Prior to the amendment, section 13(1) referred to an “eligible transaction” as “the purchase of a home in the ACT”. The definition of a “home” in section 4 was a building used “as a place of residence”. The amending Act added “new” into section 13, such that an “eligible transaction” was now “the purchase of a new home in the ACT”. A definition of “new home” was added by section 12B to the effect that “a new home is a home that has not been previously occupied or sold as a place of residence, and includes a substantially renovated home”. The respondent submits that in including in the definition “a substantially renovated home” so as to embrace ‘old’ homes but only if they are renovated shows that the intended meaning of a “new home” denoted a quality of ‘newness’ in its ordinary sense. In the respondent’s submission this is sufficient to denote that literal newness is the intended essential concept of the eligible transaction requirements.

[13] (1981) 147 CLR 297

[14] [1978] HCA 54

[15] [1981] HCA 60

[16] [2007] HCA 1

45.The respondent contends that in further interpreting the meaning of the phrase “occupied as a place of residence” the next step is to look at the context of the Act as a whole. The respondent submits that internal interpretive assistance can be gained from examining the use of the term “principal place of residence” elsewhere in the Act so as to illuminate the meaning and quality of “residence” as used in section 12B. As an eligibility requirement of the applicant (as distinct from an eligibility requirement of the transaction) section 12 provides that the applicant must post-completion occupy the property as a "principal place of residence" for a defined period. The respondent says this usage necessarily connotes that it is possible to have more than one place of residence and relies on Kozman v Chief Commissioner of State Revenue[17] in this regard. In the respondent's submission using the quality of “principal” shows that it is possible to remove the quality of permanence from the meaning of “residence” in some instances. As a consequence, prior use as a serviced apartment for instance for ‘shorter periods’ as is the accepted case with the applicant’s property, will still have the 'residence’ quality that section 12B of the FHOG Act envisages.

[17] [2013] NSWADT 143 at [32]

46.In the respondent’s submission similar illumination is gained from the context in which this same phrase "principal place of residence" is used in the HBC Instrument. The respondent submits that it is the 'principal' element that connotes the required degree of residential permanence demanded of an eligible applicant and not the 'place of residence' itself which "where the occupation is transient, temporary or of a passing nature...is not sufficient to establish occupation" (section 4(14)). The respondent contends that the reading of section 12B being urged by the applicant is one that reads "place of residence" as having the same meaning as "principal place of residence" in section 12. The respondent says instead that the use of the phrase in section 12B must be taken as a broader concept which is not narrowed by the qualifier "principal" (as it is in section 12) and as such does not exclude short term accommodation from the meaning of “residence”.

47.The respondent contends that the tribunal should, in its interpretive process next look to extrinsic material for interpretive assistance. Section 141 of the Legislation Act provides the tribunal may in certain circumstances have regards to extrinsic material, as the ACT Supreme Court (Court of Appeal) makes clear in Haureliuk [18] to work out the meaning of the Act.

[18] at [30]

48.The respondent submits that the addition of the term "new" to section 13 and the introduction of the concept of a "substantially renovated home” are expressions of the purpose of the amending Act to now target the FHOG at "newly built or renovated homes". In the absence of any statutory amendment to the purpose stated in the Act’s long title as to "to encourage and assist home ownership, and to offset the effect of the GST on the acquisition of a first home" the respondent submits the tribunal should have regard instead to the extrinsic material to confirm this fresh purpose.

49.The Explanatory Statement of the FHOG Amendment Bill provides that "[u]nder this amendment, the grant in the ACT will be retargeted to new and substantially renovated properties only...". The respondent contends that the interpretation urged by the applicant is not consistent with this restatement because, in order for it to apply to her purchase, it would need to extend the meaning of "new" home to cover ‘old homes’ such as hers which have not been subject to substantial renovation.

50.Alternatively, the respondent submits that even if the interpretation urged by the applicant achieved some of the purpose of the Act in that it encouraged her first home purchase, the tribunal must prefer an interpretation that "best" achieves the retargeted legislative intention, Re Islam (2010) 4 ACTLR 235[19] and so exclude her purchase.

[19] at [43]

51.In a similar way, the respondent says the Explanatory Statement of the HBC Instrument recites (paragraph 1) that the ACT Government would make changes to "encourage the building of new housing and support the construction industry".  The statement provides in paragraph 8 that "an eligible property under this scheme is [now] limited to new and substantially renovated homes and land only". The respondent submits the meaning advanced by the applicant that "new home" extends to old homes is directly contradictory to these stated purposes.

52.The respondent submits that in the process of interpretation the tribunal should only turn to prior judicial interpretation if doubt remains when working out the meaning of the statutory provisions after following these previous steps. The respondent contended the presumption arising from prior judicial interpretation of a word or phrase is a weak one, citing in this regard Bacon v Salamane[20]; Flaherty v Girgis[21]  and Foots v Southern Cross Mine Management Pty Ltd[22].  Additionally, if such regard is had, attention should be focused on the particular statutory test at issue, with care being taken in the use of authorities from other jurisdictions or from other statutory regimes citing Leichhardt Council v RTA (2006) 149 LGERA 439[23], 447 approved in this tribunal in Tuggeranong Town Centre v Commissioner for ACT Revenue[24].

[20] (1965) 112 CLR 85 per Windeyer J at 89-90

[21] (1987) 162 CLR 574

[22] [2007] HCA 56 at [61-63]

[23] Also cited as Leichhardt Council Roads & Traffic Authority of NSW [2006] NSWCA 353.

[24] [2010] ACAT 29 at [16].

53.The respondent submits that one such jurisdiction whose judicial decisions can be safely referenced is the NSW jurisdiction where the statutory test is very similar. In McTackett v Chief Commissioner of State Revenue[25](“McTackett”)  a transfer by direction to an applicant for a grant of a property not yet built at the time of sale was still construed as being “sold as a place of residence". Similarly, in Nairn v Chief Commissioner of State Revenue[26] an off-the-plan on-sale to an applicant where the transferring buyer did not intend to reside in the property was taken to be a sale "as a place of residence" and so excluded entitlement to a grant.

[25] [2003] NSWADT 154

[26] [2011] NSWADT 41

54.The respondent’s summative contention is that the use of the property even as a temporary dwelling as a serviced apartment, remains sufficient to determine its use as a “place of residence” within the meaning of a “new home” in both instruments and so, the entitlement to a grant or a duty concession is not available.  

Tribunal’s Consideration

55.There is no doubt that the applicant is a genuine first home owner.

56.There is agreement that the subject property was, prior to its purchase by the applicant, used for short-term accommodation as a serviced apartment.

57.It is appropriate to consider the two statutory instruments together as both contain the phrase “not previously occupied or sold as a place of residence” in their definition of “new home”.

58.In a literal sense the property is not 'new' having been constructed in 2006 and purchased in 2013. The Shorter Oxford English Dictionary defines 'new' as "not existing before; now made or existing for the first time". 

59.But the meaning of "new" provided in the FHOG Act and the HBC Instrument is not its literal meaning. With the insertion of a specific meaning of “new home” by the FHOG Amending Act in section 12B, it is this particular meaning, namely "a home that has not been previously occupied or sold as a place of residence, and includes a substantially renovated home” rather than literal newness that the legislature intended was the essential eligible transaction quality for a FHOG. In the case of the HBC Scheme, the specific meaning of “new home” is similar though confined to "a dwelling that has not previously been occupied or sold as a place of residence”.

60.As such it is incumbent on the tribunal to work out the particular meaning of "new" as "previously occupied or sold as a place of residence" as the eligible transaction quality for a grant payment and a duty concession respectively for the applicant's purchase.

Does the property the applicant purchased have the statutory quality of a “new home”?

61.As the ACT Court of Appeal held in Haureliuk[27], the starting point for working out the meaning of an Act is the Legislation Act. Section 139 provides for a relatively unorthodox purposive approach in specifying, as the same court made clear in Re Islam[28], a meaning "that would best achieve the purpose of the Act" and that is the case, whether or not there is an express statement of the Act's purpose in the instrument. Section 136 extends “an Act” to include a statutory instrument such as the HBC Instrument.

[27] at [19]

[28] at [43]

62.In the case of the FHOG Act, there is an express purpose, relevantly "to encourage and assist home ownership…” . This purpose was not amended or altered in the retargeting of the Act to "new homes" by the FHOG Amendment Act. In the case of the HBC instrument there is no express statement of purpose. The Disallowable Instrument's title provides some indication of a purpose in that the HBC Scheme is directed at "new and substantially renovated homes and land only". But in both instances something further is needed to determine a meaning "that would best achieve the purpose of the Act".

63.Haureliuk provides guidance[29] that section 138 permits "displacing the apparent meaning" of words where that "apparent meaning leads to a result that is manifestly absurd or is unreasonable".

[29] at [19]

64.Haureliuk further indicates the exercise of working out the meaning must be performed in such a way that “the provisions of the Act must be read in the context of the Act as a whole” (s 140) and that "material not forming part of the Act may be considered in certain circumstances" for this purpose (s 141).

65.The following analysis puts this approach into effect in working out the particular meaning of “new home” as defined as “previously occupied or sold as a place of residence” in the respective instruments.

66.A meaning that best achieves the purpose of the instruments as per section 139 requires a closer examination of that purpose. The applicant has contended the object or purpose of the two provisions is identical, namely to assist first home buyers to purchase a home. She is a first home buyer and the object of the Act is therefore clearly achieved by granting the FHOG and the HBC to her provided her purchase is an eligible transaction. The respondent has contended that identifying the purpose is part of working out the meaning of the Act and that that purpose is to be ascertained from the text or context (s140), from extrinsic material (s141) and additionally, from the legislative history of the provisions particularly where these provisions have been affected by amending legislation.

67.The section 138 consideration requires a determination of the meaning "new home" as relevantly defined as “a home that has been not previously occupied or sold as a place of residence”. Once a determined meaning is reached for that phrase, consideration can then be given to whether that interpretation should be displaced or discarded because it leads to a result that is manifestly absurd or is unreasonable.

68.The respondent advanced the view that literal newness is the intended essential concept of "new home" in the eligibility requirement of the FHOG Act and in the provisions of the HBC Instrument. But this is not borne out by the definitions of “new home” inserted in each instrument by the legislature. The amendments introduced a statutory meaning which is distinct from literal newness.

69.As set out in paragraph 31, the Shorter Oxford English Dictionary defines “residence” as “the circumstances or fact of having one’s permanent or usual abode in or at a certain place; the fact of residing or being resident…”. The Macquarie Concise Dictionary defines “residence” as “the place, especially a home in which one resides; dwelling place; dwelling”. It also defines "reside" as "to dwell permanently or for a considerable time; have one's abode for a time".

70.The tribunal finds that the ordinary meaning of “place of residence” requires a permanent or long-term commitment to the occupation of the premises as the occupant’s usual abode. The respondent advanced the view that this degree of permanence would only be established where a qualifier such as "principal" had been added to "place of residence”. For example, such a qualifier is used in both schemes for the separate exercise of determining the eligibility of applicants as genuine first home buyers. The respondent contends that, because the expression is not so narrowed in the definition of “new home” in section 12B, it therefore does not exclude temporary or short term occupation from its application. However this contention would require the tribunal to depart from the ordinary meaning of “residence”.

71.The tribunal has regard, in determining whether such a departure is warranted, to the manner in which the same or a similar phrase has been construed in prior judicial interpretations. It is guided in this regard by the High Court's affirmation in Alcan[30] of the principle that where “the Parliament repeats words which have been judicially construed, it is taken to have intended the words to bear the meaning already ‘judicially attributed to (them)’ ”. The tribunal nonetheless is mindful of the need for caution when having regard to how similar words are used and interpreted in different statutory tests and in different jurisdictions: Leichhardt Council.

[30] at [20]

72.In this regard the meaning construed for the similar phrase in the GST Act by the Full Federal Court in Marana Holdings attributed to “residence” the ordinary meaning quality of “involving a degree of permanent or long-term commitment to the occupation of the premises” such that a motel unit which was subsequently sold was not seen as a “residence”. Significantly, following that decision the definition of "residential premises" in section 195-1 of the GST Act was amended to insert an additional phrase “regardless of the term of occupation or intended occupation” acknowledging that in its ordinary sense the terms “residence” ordinarily excluded temporary occupation. The decision in Marana Holdings was followed by the Supreme Court of Queensland in Hedley where occupation as a “residence” was held to be "permanent or long-term" and in Zappala[31] where it was held that “Short Term Accommodation...by its definition, is the opposite of residential use”.

[31] at [81]

73.The meaning for a similar statutory test to that of the FHOG and HEC schemes has also been construed by the NSW Administrative Decisions Tribunal in a number of decisions. In McTackett the tribunal found that a home had been previously “sold as a place of residence” to off-the-plan buyers even though they had never resided in the property and had simply on-sold the property to the applicant who was first to appear on the title. In Nairn, essentially the same factual circumstances arose. In both decisions the purchase was seen to be robbed of the quality of “new” in the statutory sense because the property had previously been sold. However these decisions are of little real assistance in construing the ordinary meaning of “place of residence” because they relate to “sold” rather than “occupied” as is the case here. The tribunal's decision in Zakariya v Chief Commissioner Office of State Revenue[32]  is of more assistance because it relates directly to the question of occupancy finding that temporary occupation of two to three days a week did not satisfy the "principal place of residence" requirement because it was not “residential occupation”. But this decision merely confirmed that the qualified term “principal place of residence” does not connote temporary occupation. It does not affect the position that “place of residence” standing alone may not cover short term accommodation.

[32] [2003] NSWADT 26

74.Taking into account the meaning already judicially attributed to the phrase in these decisions, the ordinary meaning of “place of residence” remains clear as requiring permanence of occupation and excluding mere temporary occupation. The additional section 138 question is whether that meaning should be discarded because it leads to a result that is manifestly absurd or is unreasonable in the context of the Act and its purpose? There is some unease in finding a property that does not possess the literal quality of newness to be a “new home”, but the legislature has seen fit not to frame its provisions in terms of that literal meaning. In its place a definitional construction of newness as “not previously sold or occupied as a place of residence” is used. That ordinary meaning requires permanence of occupation and excludes mere temporary occupation. The test for discarding an absurd or an unreasonable result is that set by the High Court in Cooper Brookes, namely that “the result of giving the words their ordinary meaning may be so irrational that the court is forced to the conclusion that the draftsman has made a mistake”[33]. The result is curious but it is not manifestly absurd or unreasonable and there is no evidence that a mistake has been made.

[33] at [304]

75.The next interpretive step Haureliuk sets in working out the meaning of the words or phrase is to look at that meaning in the context of the Act as a whole as provided by section 140. The context of an Act includes the “background of its legislative history”, particularly of an amending Act: Cooper Brookes at 310. This exercise is subject to the useful caution repeated by Stephen J in Dugan[34] not to stray too far from the text and go “to the statute only when the legislative history is doubtful”.

[34] at [21]

76.As regards the FHOG Act, prior to its amendment section 13(1) referred to an “eligible transaction” as “the purchase of a home in the ACT”. After amendment, the word “new” was added into section 13 such that an “eligible transaction” now becomes “the purchase of a new home in the ACT”. A definition of “new home” was added by section 12B to the effect that “a new home is a home that has not been previously occupied or sold as a place of residence, and includes a substantially renovated home”. The respondent submitted that in including in the definition “a substantially renovated home” so as to embrace “old” homes but only if they are renovated shows that the intended meaning of a “new home” denotes a quality of ‘newness’ in its literal sense. In the tribunal’s view any particular relevance attached to including “a substantially renovated home” in the FHOG Act “new home” definition is diminished because this approach was not followed in the re-released HBC Instrument where a “new home” is defined only as “a dwelling that has not previously been occupied or sold as a place of residence”. This should not distract the tribunal’s attention from the heart of the definitional clause of “not been previously occupied or sold as a place of residence”.

77.The respondent submitted that further internal interpretive assistance can be gained from examining the use of the phrase “place of residence” in other contexts in the Act. This phrase is used in the context of setting the eligibility criteria for applicants such that section 12 provides the applicant must post-completion occupy the property as a "principal place of residence" for a defined period. The respondent submitted this usage necessarily connotes that it is possible to have more than one place of residence and the tribunal accepts this proposition. In the respondent's submission this means that without the qualifier “principal” the necessary quality of permanence is removed from the meaning of “place of residence” when it is used simpliciter. Since the qualifier is not used in section 12B of the Act, such permanency is not intended and therefore prior use as a serviced apartment for ‘shorter periods’ will constitute a “place of residence”. In a similar light, the same phrase "principal place of residence" is used in the HBC Instrument. The respondent submits the 'principal' element connotes the required degree of residential permanence demanded of an eligible applicant. The absence of that element produces occupation that is “transient, temporary or of a passing nature" (section 4(14)) which does not qualify as “principal”, but nonetheless does qualify as a “place of residence”. On this argument, a serviced apartment does lack the quality of permanence, but has the quality of residence.

78.The element of “principal” merely shows that it is possible to have more than one place of residence. Its absence in the phrase under consideration does not necessarily expand the meaning of “place of residence” to also include transitory or temporary accommodation such as that characterised by a serviced apartment. This was the interpretation that ACTAAT took in Fincher, John v Commissioner for ACT Revenue[35] when considering the term “principal place of residence” in taxing legislation. The tribunal held that “a person may have more than one place of residence at any one time….But each place of residence must have something of a settled character about it; a person cannot be said to reside at a place if his or her connection with the place is transient or temporary or of a passing nature”.

[35] [1996] ACTAAT 134 at [13]

79.In overall terms, the process of working out the meaning of the phrase within the text and the context of the Act must be consistent with the statement in Cooper Brookes at 310 that “if the literal meaning is to be departed from, it must be clear beyond question both that literal meaning does not give effect to the intention of the legislature and that some departure from literal meaning will fulfil that intent.” In the present case the literal meaning as judicially construed of “place of residence” connotes permanence. The serviced apartment the applicant purchased lacks that permanence. Extending eligibility for a grant and a concession to that purchase fits within the statutory definition of a “new home” not previously sold or occupied as a place of residence and thereby still achieves the statutory purpose of “encourage[ing] and assist[ing] home ownership". The use of this phrase in its context within the Act as a whole does not warrant a departure from this interpretation.

80.The final step when working out the meaning of the Act is that the tribunal may have regard to extrinsic material as per section 141. The applicant and respondent provided differing views as to the weight that should be given to such material. The applicant contended that it is only when the ordinary meaning of the phrase in its context and as judicially interpreted cannot be worked out that extrinsic material can be taken into account to determine that meaning, citing Haureliuk. The respondent urged a wider view, that extrinsic material may be used to identify the purpose of the Act since that is part of working out the meaning of the Act, citing section 138. The tribunal prefers a middle course as suggested by the eminent authors D C Pearce & R S Geddes in Statutory Interpretation in Australia 8^th ed 2014 [at 3.18] such that the tribunal can consider the extrinsic material but leaving open the possibility that “it cannot assist because the words are not ‘ambiguous’ or ‘obscure’ and that giving the words their ordinary meaning does not lead to a ‘manifestly absurd’ or ‘unreasonable’ result”.

81.The respondent submitted that the addition of the term "new" to section 13 and the addition of the concept of a "substantially renovated home” within that term in the FHOG Act are expressions of a fresh purpose to target the grant at "newly built or renovated homes". In the absence of any consequent change to the long title purpose of “encourage[ing] and assist[ing] home ownership" the respondent submitted the tribunal should have regard to the extrinsic material to confirm this change. The Explanatory Statement of the FHOG Amendment Bill provides that "[u]nder this amendment, the grant in the ACT will be retargeted to new and substantially renovated properties only...". The Minister’s presentation speech during the passage of the Bill confirmed that the FHOG was being retargeted to “first homebuyers of new homes”.  The respondent contended that the interpretation urged by the applicant of the phrase “previously occupied as a place of residence” so as to exclude short-term occupation as a serviced apartment is not consistent with this restatement of purpose. Nonetheless, the definition of "new home” the legislature placed in the Act through the amending Bill specifically departs from literal newness. The tribunal finds that the overriding purpose of the Act as per its long title, to encourage and assist home ownership, therefore remains in place. The tribunal further finds that the FHOG Amendment Act retargeted that purpose to encourage and assist new home ownership in the terms defined in the Act and that the applicant’s purchase falls within that statutory definition of “new home”.

82.The HBC Scheme had been similarly retargeted from 1 September 2012 a year before the FHOG amendment. The Explanatory Statement of the relevant HBC instrument DI2013-227 recites the earlier decision of the ACT Government to change the scheme to "encourage the building of new housing and support the construction industry".  It provides in paragraph 8 that an eligible property is now limited to two separate classes of dwellings – “new homes” and “substantially renovated homes". The respondent submitted that the meaning advanced by the applicant to extend "new home" to her old home (constructed in 2006) is directly contradictory to this re-stated purpose.

83.There is no doubt the extrinsic material for both instruments makes clear an intention to alter their purpose to target new homes only. Nonetheless, the definition of “new home” placed in each instrument (though different in one respect) on its ordinary meaning provides eligibility to transactions of homes which are not literally new. The applicant separately meets the personal eligibility criteria for each scheme. The availability of the schemes encouraged her first home purchase. She is now a first home owner of a property which on the ordinary meaning of both provisions she purchased as a “new home”. Having considered material not forming part of the Act as provided for in section 141, the tribunal finds that this material is insufficient to shift the ordinary meaning of “place of residence” given that no manifestly absurd or unreasonable result arises. The ordinary meaning should not be displaced.

84.The tribunal finds as a consequence, in working out the meaning of the phrase “place of residence”, that it should not depart from its ordinary meaning as judicially construed in its context. The tribunal find that the definition of “new home” as “not been previously occupied or sold as a place of residence” includes a home previously occupied only as a serviced apartment.

Conclusion

85.The tribunal concludes that the decisions under review should be set aside.

86.The tribunal finds the applicant is eligible for the FHOG and the respondent must reassess her entitlement.

87.The tribunal finds the applicant is eligible for the HBC. On 13 November 2013, the applicant paid assessed duty of $16,875. The respondent must reassess the applicant’s concession entitlement and refund her such part of the duty paid which is overpaid together with interest provided for in section 111 of the Taxation Administration Act.

Decision

88.The decision under review is set aside and substituted with a decision allowing the objections. To remove doubt, the applicant’s FHOG and HBC applications are granted.  

………………………………..

Dr T. Foley – Senior Member

HEARING DETAILS

FILE NUMBER:	AT14/31 & AT14/32
PARTIES, APPLICANT:	Felicity Hammond
PARTIES, RESPONDENT:	Commissioner for ACT Revenue
COUNSEL APPEARING, APPLICANT	Self
COUNSEL APPEARING, RESPONDENT	Dr D. Jarvis
SOLICITORS FOR APPLICANT	Self
SOLICITORS FOR RESPONDENT	ACT Government Solicitor
TRIBUNAL MEMBERS:	Dr T. Foley
DATES OF HEARING:	24 October 2014