HISCOCK and COMMISSIONER OF STATE REVENUE - [2010] WASAT 167

JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL

STREAM: COMMERCIAL & CIVIL

ACT: FIRST HOME OWNER GRANT ACT 2000 (WA)

CITATION: HISCOCK and COMMISSIONER OF STATE REVENUE [2010] WASAT 167

MEMBER: JUSTICE J A CHANEY (PRESIDENT)

HEARD: DETERMINED ON THE DOCUMENTS

DELIVERED : 17 NOVEMBER 2010

FILE NO/S: CC 687 of 2010

BETWEEN: SCOTT HISCOCK
Applicant
AND
COMMISSIONER OF STATE REVENUE
Respondent

Catchwords:

Stamp duty - First home owner concessional rate of duty - Whether reviewable decision - Whether discretion to extend time for objection

Legislation:

First Home Owner Grant Act 2000 (WA), s 15(5)(b), s 31(1)
Taxation Administration Act 2003 (WA), s 16(1)(c), s 16(2), s 17, s 31, s 35, s 35(b), s 36(1), s 36(4), s 36(5), s 36(5)(b), s 40, s 40(1)
Duties Act 2008 (WA), s 142(1), s 143(1), s 144

Result:

Application dismissed

Category: B

Representation:

Counsel:

Applicant: Self-represented
Respondent: State Solicitor of Western Australia

Solicitors:

Applicant: Self-represented
Respondent: State Solicitor's Office

Case(s) referred to in decision(s):

Nil

REASONS FOR DECISION OF THE TRIBUNAL:

Summary of Tribunal's decision

Mr Scott Hiscock applied for a review of a decision of the Commissioner of State Revenue to refuse to refund stamp duty paid in relation to a purchase by him and his partner of a home in Morley. Mr Hiscock's claim was that he should be entitled to the first home owner concessional rate of duty, which would have resulted in him paying no stamp duty, rather than the $11,827.50.
Mr Hiscock had applied for a first home owner grant, but had done so after the time limited for making an application. Because there was no discretion on the part of the Commissioner to extend that time, the application for a first home owner grant was declined. Because the concessional rate of stamp duty was only payable where the purchasers had been paid, or would be paid, a first home owner grant, the application for refund of the stamp duty was also declined.
Questions arose as to whether or not there was any reviewable decision which would enliven the jurisdiction of the Tribunal in Mr Hiscock's case. The Tribunal examined that question and concluded that there had been no valid objection, and thus there was no decision on an objection, which would enliven the Tribunal's jurisdiction to review the Commissioner's decision. The Tribunal also considered whether the Commissioner's refusal to grant a refund of duty, even if it were considered a decision on an objection, was the correct decision. The Tribunal concluded that the Commissioner was correct and that there was no basis for any refund of the duty.
Accordingly, the application for review was dismissed.

The application

The applicant, Mr Scott Hiscock, seeks a review of an assessment of stamp duty of $11,827.50 which was paid in respect to a purchase by him and his partner Ms Krystyne Emery of a property at 53 Charnwood Street, Morley in October 2008. (Ms Emery is also referred to in some of the correspondence before the Tribunal as Krystyne Hiscock or Mrs Hiscock and in these reasons I will use those names interchangeably.) In essence, Mr Hiscock claims that he was entitled to the stamp duty concession applicable to those who are entitled to a first home owner grant, under the First Home Owner Grant Act 2000 (WA) (FHOG Act).
After the application was issued, the Commissioner of State Revenue (Commissioner) raised preliminary issues as to whether there was a reviewable decision in relation to the stamp duty paid, and whether the applicant is out of time to object, or to request an extension of time to object, or to request a reassessment of the duty.
The Tribunal directed that those issues be dealt with the substantive issue as to whether the applicant is eligible for the first home owner concessional rate of duty on the acquisition of the property.

The chronology of events

On 9 August 2008, Mr Hiscock and Ms Emery entered into an agreement to purchase the property for $375,000. That contract for sale was not submitted to the Office of State Revenue (OSR) until 23 October 2009, at the same time as Mr Hiscock and Ms Emery applied for a first home owner grant. The transfer of land form to give effect to the agreement was, however, executed on 30 September 2008 and lodged with OSR on 3 October 2008. It was assessed for duty at $11,827.50 on the same day. The duty was paid, and settlement proceeded. It is common ground that the applicant became entitled to possession of the property on 7 October 2008.
More than 12 months later, on 23 October 2009, an application was lodged with OSR for a first home owner grant by Mr Hiscock and Ms Emery. According to Mr Hiscock's submissions, when the first home owner grant application was lodged, a 'verbal objection was made in person' about the assessment of duty, but OSR staff stated that nothing further could be done with regards to the first home owner grant and refund of stamp duty until the written response was received to the application.
On 30 October 2009, the Commissioner responded to the application for the grant, and advised that the applicants were not eligible because the application was made more than 12 months after the payment eligibility date. The letter advised that if the applicants were dissatisfied with the decision, they had the right to lodge an objection to the decision within 60 days of the date of the notice.
On 5 November 2009, Mr and Mrs Hiscock wrote to the Commissioner in response to the letter of 30 October 2009. They noted that the only objection to their application was that it was made more than 12 months after the payment eligibility date, and asked for reconsideration of the application due to extenuating circumstances concerning the health of Mr Hiscock's father. The letter concluded 'Also your letter makes no reference to our application for First Home Owner's rate of Stamp Duty. Could you please advise your decision on this matter?'.
The request for reconsideration was repeated in a letter dated 7 December 2009, apparently because, upon enquiring about the progress of the matter, Mrs Hiscock was advised that the letter of 5 November 2009 had not been received.
On 10 December 2009, the Commissioner reaffirmed his earlier decision that the first home owner grant would be declined because the application was made more than 12 months after the completion of the eligible transaction, and there was no discretion to extend the time period for an application.
On 14 December 2009, Mr Hiscock emailed OSR to enquire as to the process for appealing the Commissioner's decision. He added 'furthermore can you please advise on how to apply for the return of additional stamp duty paid, as detailed in our previous letter.'
By email dated 29 December 2009, the Commissioner's delegate repeated the explanation that the application was out of time. Mr Hiscock repeated his request for advice as to the process for appealing the Commissioner's decision in an email response of the same date. The Commissioner's delegate responded advising of the right of review by the State Administrative Tribunal, and in relation to the application for the first home owner rate of duty, the delegate advised that 'the concessional rate of duty may only be applied where an application for the First Home Owner Grant has been or will be paid. Accordingly, if your application for the grant has not been approved you are not eligible for the duty concession.'
A chain of further emails occurred during January 2010 which in essence simply reiterated each party's position, and it is not necessary to review those in detail for the purposes of these reasons.

Is there a reviewable decision?

The Commissioner contends that the Tribunal lacks jurisdiction because there is no decision by him capable of review by the Tribunal. To understand that submission, it is necessary to have regard to the relevant statutory provisions.
Section 31 of the Taxation Administration Act 2003 (WA) (TA Act) provides that a taxpayer is not entitled to challenge the validity or correctness of an assessment, or of any other decision for which rights of objection or review are conferred by this Act, except in proceedings by way of objection or in review proceedings, or in any other manner specifically provided in a taxation act. The relevant provisions for objection and review are found in the TA Act.
Although the application form lodged by Mr Hiscock in these proceedings utilised the application form applicable to an application for review pursuant to s 31(1) of the FHOG Act, the decision sought was for a refund of stamp duty, and not a review of the decision to disallow the application for a first home owner grant. The jurisdiction for Tribunal to review assessments of stamp duty arises under s 40 of the TA Act. That section provides:
40. Right of review
(1)A person dissatisfied with the Commissioner’s decision on an objection or on an application for an extension of time for lodging an objection may apply to the State Administrative Tribunal for a review of the decision.
It can be seen that the jurisdiction of the Tribunal arises in relation to a decision by the Commissioner 'on an objection' or 'on an application for an extension of time for lodging an objection'. It is therefore necessary to identify the decision by the Commissioner which forms the subject matter of the application for review in these proceedings to see whether it is a decision of the character described in s 40 of the TA Act.
Under the TA Act, an objection must set out fully and in detail the grounds on which the taxpayer objects to the assessment - TA Act s 35(b).
Section 36(1) of the TA Act prescribes a time for lodging an objection. In a case such as this where the assessment of duty is denoted by the immediate stamping of the amount of duty on the document, the objection must be lodged within 60 days of the stamping.
Section 36(4) enables the Commissioner, on application by the taxpayer, to extend the time for lodging an objection. However, s 36(5) provides
(5) An application for an extension of time -
(a)must be made within 12 months after the date on which the objection was to have been lodged under subsection (1), (2) or (3), but may be made before or after that date; and
(b)must set out in detail the grounds on which the applicant asks for an extension of time.
It follows that the Commissioner does not have the jurisdiction to consider an objection made more than 12 months after the last date on which the objection should have been lodged.
Given that the transfer was stamped on 4 October 2008, the time for lodging an objection expired on 3 December 2008. It was then open to Mr Hiscock to apply for an extension of time to lodge an objection at any time until 12 months later, being 3 December 2009.
The Commission contends that no objection meeting the requirements of s 35(b) of the TA Act was lodged within that time.
Mr Hiscock's response to that contention is that he made a verbal (which I take to mean oral) objection when he attended the OSR in person on 23 October 2009. The requirement of s 35 for the objection to be in writing and to set out fully and in detail the grounds of the objection is an obligatory requirement. That follows from the use of the word 'must' in that section. If it is accepted that Mr Hiscock made an oral reference to a refund of stamp duty when he delivered his written application for a first home owner grant, that would not satisfy the requirements of s 35 of the TA Act so as to constitute that communication an objection for the purposes of the TA Act. I therefore find that no valid objection to the stamp duty assessment was made on 23 October 2009.
Mr Hiscock also relies upon his letter of 5 November 2009 as an objection to the stamp duty assessment. That letter comprises five paragraphs. The first four concern the application for the first home owner grant. As noted above, the final paragraph reads:
Also your letter makes no reference to our application for First Home Owner's rate of Stamp Duty. Could you please advise your decision on this matter?
Presumably, the 'application for First Home Owner's rate of Stamp Duty' referred to in the letter is a reference to the oral request for a refund for stamp duty on 23 October 2009. Mr Hiscock did not point to any other communication which might constitute an application for a refund of duty. As already observed, that oral request is not capable of constituting an objection for the purposes of the TA Act.
Nor do I consider that the letter of 5 November 2009 itself constitutes an objection for the purposes of the TA Act. In its terms, it appears to be a reference to some other application, rather than being an application itself. In any event, it does not 'set out fully and in detail the grounds upon which the taxpayer objects to the assessment' and therefore does not comply with the requirements of s 35(b) of the TA Act. The letter was well outside the time within which an objection could be lodged, although it was within the period during which an application for an extension of time to object could be made. Section 36(5)(b) requires that an application for an extension of time set out in detail the grounds upon which the extension of time is sought. The letter of 5 November 2009 does deal with the reason for delay in the application for the first home owner grant, which, given the most beneficial construction of the letter, might be taken to be the grounds upon which an extension of time for an objection to the stamp duty should be granted. Even with that beneficial construction, however, the difficulty for the applicant that the Commissioner did not treat the letter of 5 November 2009 as an application for extension of time to object, and thus there is no 'decision … on an application for an extension of time' which would give rise to a right of appeal under s 40 of the TA Act.
The chain of email communications commencing on 14 December 2009 all occurred after the last date upon which an application for extension of time could be made, and accordingly cannot constitute a valid application for an extension of time to object, or a valid objection to the stamp duty assessment.
It follows that there is no decision capable of review by the Tribunal utilising the jurisdiction conferred on it by s 40 of the TA Act. The application must fail on that ground.
As the chronology of events above discloses, however, the Commissioner did reject the application for a refund of stamp duty on the basis that, in the absence of payment, or the prospect of payment, of a first home owner grant, no entitlement to the concessional rate of duty applies. For the sake of completeness, it is appropriate that I give consideration as to whether or not the Commissioner's advice in that respect was correct.

Entitlement to concessional rate of duty

Section 142(1) of the Duties Act 2008 (WA) provides:
(1)A reference in this Division to a FHOG concessional transaction is to a transfer of, or an agreement for the transfer of, dutiable property where -
(a)the transferee or, if there are more than one, each transferee -
(i)is paid a first home owner grant in relation to the property or becomes a person to whom a first home owner grant is or will be payable, in relation to the property; or
(ii)becomes a person to whom a first home owner grant would be, or would have been, payable in relation to the property if consideration had been given for the transfer of the property;
and
(b)the unencumbered value of the land, or the land and home, the subject of the eligible transaction to which the first home owner grant relates, does not exceed -
(i)if there is no home on the land - $400 000; or
(ii)otherwise - $600 000.
Section 143(1) of the Duties Act provides a duty is chargeable on a FHOG concessional transaction at the applicable concessional rate of duty. Thus, in order to obtain an entitlement to the concessional rate of duty, the transferee under the agreement must meet the requirements of s 142(1).
In this application for review, there is no challenge to the Commissioner's decision not to give the first home owner grant to Mr and Mrs Hiscock. It is apparent that Mr and Mrs Hiscock accept that an application for a first home owner grant can only be made within a period ending 12 months after the completion of the transaction to which the application relates - s 15(5)(b) of the FHOG Act. The FHOG Act does not allow for an extension of time to lodge an application. It is not in dispute that the application for a first home owner grant was lodged outside of the 12 month period prescribed by s 15(5)(b) of the FHOG Act.
It follows that the transferees, namely Mr and Mrs Hiscock, are not persons to whom a first home owner grant has been paid or will be payable. Their agreement to purchase the Charnwood Street property is not, therefore, a 'FHOG concessional transaction' as defined by s 142(1) of the Duties Act. The concessional rate of duty is therefore not available in respect to that transaction.
It follows that, even if Mr and Mrs Hiscock's letter of 5 November 2009 were treated as an objection to the assessment of duty, the objection was bound to be dismissed because the entitlement to a concessional rate of duty did not exist.

Was there a reassessment of duty?

The TA Act permits the Commissioner to make reassessments of duty in certain circumstances. Section 16(2) of the TA Act permits the Commissioner to make a reassessment on the application of a taxpayer. An application for reassessment is another way in which Mr and Mrs Hiscock may have obtained a decision on their entitlement to the concessional rate of duty applicable to first home owner grant concessional transactions. Again, for the sake of completeness, it is appropriate to consider whether or not Mr and Mrs Hiscock were entitled to apply for a reassessment.
Section 17 of the TA Act imposes time limits on reassessment, and permits an application for reassessment up to five years after an original assessment was made. However, s 144 of the Duties Act qualifies that entitlement. The effect of that section is to limit the capacity to seek a reassessment in relation to the FHOG concessional transaction to a period of 12 months after the date on which the FHOG concessional transaction was completed, in this case, 7 October 2008. No application for reassessment was made within that time.
For reasons outlined above, however, the transaction for the purchase of the Charnwood Street property was not a FHOG concessional transaction. It might be argued, therefore, that s 144 of the Duties Act which deals with FHOG concessional transactions, has no application, and the time for applying for a reassessment is thus the five year period specified in s 17 of the TA Act. On that basis, if the letter of 5 November 2009 or the subsequent email of 12 December 2009 is treated as a request for a reassessment, the Commissioner's email of 29 December 2009 declining a refund of the duty might be considered a decision in relation to the application for reassessment, and subsequent emails might be considered an objection to that reassessment. However, even if that construction is put on the correspondence, it does not assist the applicant in this case. That is because, to the extent that the Commissioner declined to reassess the stamp duty, he was clearly correct in doing so since the conclusion that the transfer was not a FHOG concessional transaction, means that the duty as assessed and paid was the correct duty payable.
Mr Hiscock submits that the Commissioner was required to make a reassessment by s 16(1)(c) of the TA Act which provides that the Commissioner must make a reassessment:
'if a taxation Act provides for a rebate or refund of tax in particular circumstances, and the circumstances were not taken into account when the previous assessment was made.'

He says that the original assessment was made on the false assumption that 'the Applicant was not eligible for the First Home Concession for Stamp Duty'. That submission incorrectly identifies the basis on which the assessment was made. Eligibility is not the test. The test for application of the concession is whether a first home owner grant is paid or will be payable. Mr and Mrs Hiscock do not satisfy that test.

Conclusion

Had Mr and Mrs Hiscock applied within time for a first home owner grant, and for reassessment of the duty, within the time required by the relevant legislation, it may well be that their applications would have been successful. One can therefore feel considerable sympathy for them given that they have missed out on a substantial financial benefit. The operation of the legislation is, however, clear, and it was not open to the Commissioner, nor is it open to the Tribunal, to circumvent the requirements of the relevant legislation. For the reasons explained above, the application must be dismissed.

Order

1.The application is dismissed.

I certify that this and the preceding [44] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
___________________________________
JUSTICE J A CHANEY, PRESIDENT