Hittmann v Chief Commissioner of State Revenue[

[2010] NSWADT 125

CITATION:	Hittmann v Chief Commissioner of State Revenue[ [2010] NSWADT 125
DIVISION:	Revenue Division
PARTIES:	APPLICANT Robert Keith Hittmann RESPONDENT Chief Commissioner of State Revenue
FILE NUMBER:	096112
HEARING DATES:	21 May 2010
DATE OF DECISION:	27 May 2010
BEFORE:	Block J - Judicial Member
CATCHWORDS:	Principal place of residence- whether residence temporary –consideration of clauses 2 8 and 12 of Schedule 1A
LEGISLATION CITED:	Land Tax Management Act 1956
CASES CITED:	Chief Commissioner of State Revenue v Paspaley [2008] NSWCA 184 Yen-Cheng Chuang & Anor v Chief Commissioner of State Revenue [2009] NSWADT 60 Chief Commissioner of State Revenue v Ferrington (GD) [2004] NSWADTAP 41 Chief Commissioner of State Revenue v Aldridge & Anor (RD) [2003] NSWADTAP 50 Chief Commissioner of State Revenue v Incise Technologies Pty Ltd [2004] NSWADTAP 19
REPRESENTATION:	APPLICANT In person RESPONDENT M Carpenter, barrister
ORDERS:	The decision under review is affirmed.

REASONS FOR DECISION

Part A; preliminary and background

1 The decision under review is the decision made on 13 August 2009 by the Respondent (who is usually referred to in these reasons as the "Chief Commissioner") in which he disallowed an objection against land tax assessments for the land tax years 2003 to 2009 (both years inclusive) in respect of the Applicant’s property at 70 Darley St Newtown Sydney ("the property" or "the Newtown property").

2 The Tribunal had before it the documents lodged pursuant to section 58 of the Administrative Decisions Tribunal Act 1997 divided into tabbed parts and numbered from 1. to 17. The Tribunal also had before it written submissions by the parties and an affidavit by the Applicant dated 21 January 2010 which was admitted as Exhibit A1. The Chief Commissioner in addition and at the hearing furnished the Tribunal with a helpful and detailed summary (‘the summary") of documents obtained under summons to produce and which also contains references to the section 58 documents.

3 The Applicant was self represented; however he was assisted by his partner, Ms Dickstein who, when the Applicant was giving oral evidence took over the advocacy role. Each of the Applicant and Ms Dickstein took part at the submission stage. I refer to her throughout this decision as the Applicant’s partner because he described her in this fashion and even though she is in accordance with Clause 12 of the Schedule (as hereafter defined) his spouse.

4 It should be noted that although the objection by the Applicant related to the seven land tax years referred to in clause 1 the Applicant at an early stage of the hearing informed the Tribunal that he intended to confine his appeal to the 2004, 2005 and 2006 land tax years; they are collectively referred to in these reasons as “the relevant years"; however the other land tax years referred to in clause 1 remain relevant because the Applicant objected to the imposition of interest in respect of all of those years.

5 The Chief Commissioner filed written submissions referable to all of the land tax years referred to in clause 1 in March 2010. The Chief Commissioner’s written submissions are quite extraordinarily (and commendably) comprehensive running to 91 clauses in 24 pages. The Applicant knew exactly what the Chief Commissioner’s case was. The Applicant had previously and in January 2010 filed a brief affidavit (Exhibit A1) and equally brief submissions. The Applicant did not in the light of the Respondent’s detailed submissions think it necessary or desirable to amplify the sparse documentation which had been filed by him previously; he also did not produce evidence which was clearly relevant and important, and in particular but not only the evidence of his daughter Olivia. The Applicant made it clear that he intended to contest the assessments for the relevant years because of the fact that Olivia lived in the property during the relevant years; on this basis her evidence was clearly needed. In the same context and in respect of structural repairs there was no evidence as to what structural repairs were effected during the relevant years. There were during the relevant years three groups of tenants to whom the property was leased but the leases executed by those tenant groups were not produced. During the hearing, and in particular at the submission stage, the Applicant repeatedly sought to suggest that he knew nothing at all about land tax and complained on more than one occasion that he had never been given relevant and needed information or advice. The Tribunal finds it difficult to accept that he was as ignorant as he contended; his submissions are indicative of a more extensive state of knowledge; by way of example clause 5 of his submissions reads: "It is further submitted that the Chief Commissioner of State Revenue was mistaken in stating that the owner of the land failed to occupy the premises at each of the relevant taxing dates. The owner was in occupation on 31 December 2005." And in the same context clause 6 of his submissions reads: "It is submitted that the Chief Commissioner erred in deciding that the exemption pursuant to clause 8(7) (b) did not apply."

6 Towards the end of the hearing Ms Dickstein explained that the objection had been lodged in respect of all of the years referred to in clause 1 having regard to what she described as the general discretion contained in clause 2(2)(b) of the Land Tax Management Act 1956 ("the Act" or the :”LTM Act”). This aspect will be dealt with in more detail later in these reasons.

7 The Applicant objected also to the valuation of the property. In ground 3 of attachment 1 to his application for review the Applicant stated: "the land valuations for years 2003, 2004, 2005, 2006, 2007, 2008 must be incorrect. The CCSR has failed to address this point of objection” There is in fact no power for the Chief Commissioner to determine objections against land valuations nor is there jurisdiction for the Tribunal to review such objections. The Valuation of Land Act 1916 provides the mechanism whereby a person may lodge (with the Valuer-General) a written objection to a valuation. Where a person is dissatisfied with the Valuer-General’s determination of any such objection to the valuation, that person may appeal to the Land and Environment Court. .I refer in this context TKB Developments Pty Ltd v Chief Commissioner of State Revenue [2010} NSWADT79 which deals with the relevant procedure in some detail.

8 Once the Applicant had accepted that the question of valuation was not one which can be determined by the Tribunal he advised, as set out previously that he proposed to contest the assessments for the relevant years only although he also intended to contest the imposition of interest for all of the years referred to in clause 1. Again as set out previously, he complained that no one had ever informed him as to how the land tax system worked and advice in the Northern Territory was impossible to obtain.

9 It is convenient by way of commencement to include the content of the Respondent’s submissions under the head of “Background" and contained in clauses 4 to 20 reading (with footnotes omitted) as follows:

4. The Applicant has owned the Newtown property since 1 March 1985.

5. In 2003 and 2004, the Applicant was working and living in Maningrida, a remote aboriginal community in the Northern Territory.

6. Between 2004 – 2008, the Applicant was working and living in Darwin in the Northern Territory.

7. In 2003, 2004 and for a few months in 2005, the Applicant’s daughter and friends of the Applicant’s daughter resided at the Newtown property.

8. In 2005, the Applicant and his partner decided to return to Sydney. The Applicant says that he organised for his daughter’s friends to move out. The Applicant deposes that he and his partner moved into the Newtown property for a period of six months and that the Applicant was resident at the Newtown property on 31 December 2005.

9 In March 2006, the Applicant and his partner returned to the Northern Territory and his daughter and friends of the daughter continued living at the Newtown property until the end of 2006.

10.The friends of the daughter have paid rent for the Newtown property.

11. Since January 2007, the Newtown property has been leased for $485 per week.

12. On 18 November 2007, the Chief Commissioner wrote to the Applicant enclosing a land tax questionnaire.

13. On 14 December 2007, the Chief Commissioner sent a reminder letter with an enclosed land tax questionnaire to the Applicant.

14.On 25 January 2008, the Applicant completed an on-line initial return.

15. On 22 April 2008, the Chief Commissioner issued a Land Tax Notice of Assessment for the 2003, 2004, 2005, 2006, 2007 and 2008 tax years.

16. On 15 May 2008, the Applicant lodged an objection to the Land Tax Assessments 2003-2008 inclusive.

17 On 15 January 2009, the Chief Commissioner issued a Land Tax Notice of Assessment for the 2009 tax year.

18. On 11 May 2009, the Applicant sent, by facsimile transmission, a copy of the 2003-2008 objection to the OSR.

19.On 24 June 2009, the Chief Commissioner wrote to the Applicant regarding the allocation of the objection to a Review Officer.

20.On 13 August 2009, the Chief Commissioner wrote to the Applicant informing the Applicant that the 2003-2008 objection and the 2009 objection were disallowed.

10 The extract from the Respondent’s submissions referred to in the preceding clause has as has been noted, been included without footnotes; the footnotes indicate in clear terms that much of their content (and especially their factual content) was drawn from Exhibit A1; I refer in particular in this context to clauses 4 to 11 of the Respondent’s submissions. The evidence of the Applicant at the hearing indicated that some of that content was either inaccurate or incorrect. In particular any suggestion that the Applicant came to Sydney on anything otherwise than temporarily in order to care for his partner's mother, who was then very ill would not be correct. The evidence of the Applicant will be dealt with in part B of these reasons; insofar as anything in part B is in conflict with the content of the preceding clause, part B must take precedence.

Part B. The Applicant’s evidence

11 The Applicant's evidence was elicited over a period of approximately 2 hours. He commenced by confirming the content of exhibit A1 but with the proviso that the period of six months set out in clause 7 was not correct and the relevant period was less than 6 months and would probably (although a number of different periods were specified) about five months. Clause 7 of exhibit A1 reads as follows: -- I organised for my daughter's friends to move out and my partner and I moved into the property for a period of six months to spend extended time with the older family members and our daughter." In the same context, clause 6 of exhibit A1 reads: "In 2005 my partner and I decided to move back to Sydney as the health of some of our older relatives had declined markedly.", The words “move back to Sydney” would tend to suggest that the move to Sydney was a move on a permanent basis; the evidence revealed that the move could not accurately be so categorised.

12 The Applicant in fact owned the Newtown property since 1985. He said that he has an emotional attachment to the property. As to when precisely the Applicant first went to live and work in the Northern Territory is not altogether clear. Clause 5 of the Respondent’s submissions suggests that he might have moved to the Northern Territory in 2004 but, and having regard to his evidence at the hearing it would seem that he first moved to the Northern Territory in 1997. He said that he was an employee of the Maningrida Council from 1997 to 2004 and that thereafter and since his term of employment by that Council ended, he has conducted his own consultancy business (in the field of aboriginal affairs) in the Northern Territory. He said that he has a degree in business; he has however apparently developed an expertise in the financial affairs of aboriginal communities. In that capacity and after his employment with the Council previously referred to ended, he has received consultancy assignments from that Council and from other instrumentalities and bodies in the Territory. He and his partner have for some years lived in Darwin and where they own and run a guest house..

13 It became clear during the course of the Applicant's evidence that he and his partner journeyed to Sydney on a temporary and compassionate basis only. Notwithstanding the Applicant’s reference in his affidavit (Exhibit A1) to a desire to spend time with various relatives and his daughter, his evidence revealed that his partner's mother was in the last stage of her life and he and his partner came to Sydney in December 2005 in order to be with her. His partner’s mother died in January 2006 and in March 2006 he and his partner returned to Darwin. As I understood the Applicant the guest house was closed on a temporary basis only during this period and the Applicant took leave of absence, from his consultancy business, having made satisfactory alternative arrangements, for the ongoing work.. But in succinct terms the Applicant’s affidavit was inaccurate insofar as it would suggest that the Applicant and his partner came to Sydney on anything other than a temporary basis; it was also inaccurate as to the reasons why they came to Sydney.

14 The Applicant's daughter Olivia was born in 1979 and she is now about 30 and a student at the University of Tasmania. She has been a student for about 10 years and has from time to time during that period switched between different courses of study and including music, fine arts, law and politics, and Asian studies. She has attended various educational institutions since leaving school in 1986 and including Charles Darwin University in the Northern Territory, the University of Technology in Sydney, a music institution in Sydney and more recently the University of Tasmania. She has during this time had part-time jobs and has received government assistance in the form of HECS loans. The Applicant described her as an emotional and financial dependent but did not furnish any evidence as to what, if any, financial assistance he has furnished or is currently furnishing to Olivia. Nor was there any evidence as to exactly when during the relevant years Olivia was resident in the property more particularly having regard to the fact that Olivia has moved over the years from one state to another and from one educational institution to another. It is clear that the evidence of Olivia was relevant.. It is important to note that the Applicant was offered a postponement, and even though a postponement would have been costly to the Chief Commissioner, to enable him, the Applicant to produce further evidence in support of his case; he declined that invitation and indicated that he desired that the matter be disposed of on that hearing day.

15 The Applicant's evidence was at times vague in the extreme and it was also in some respects inconsistent, this is so in particular and as regards his return to the property in 2005 and more particularly the period involved. I refer in this context to clause 7 of exhibit A1 which has been quoted previously in these reasons. The true position is that the period was less than six months; it is possible that a period of 6 months was selected having regard to the provisions of clause 8(3)(b) of Schedule1A to the Act (“the Schedule”) .

16 Pages 1 and 2 of the summary under the head of "Tenancy agreements" read in part as follows;

Tenancy agreements

Tenancy Agreement commenced 10/5/03 Merry Jo Dickson Ray White Balmain Bond A066351-9 Bond $1,680

Nikki Philp

David Olde

Refund approval 10/1/05 Merry Jo Dickson

Nikki Philp

David Olde

Tenancy Agreement commenced 14/1/05 Joy Kyriacou Ray White Balmain Bond E192587-2 Bond $1,720

Sarah Jane Collins

Rose Jackson

Refund approval 17/12/05 Joy Kyriacou

Sarah Jane Collins

Rose Jackson

Tenancy Agreement commenced 13/3/06 Kimberly Tillyer-Strudwick Planet Bond E289073-7 Bond $1,900

Carla Pressman. Properties Petersham

Refund approval 18/1/07 Kimberly Tillyer-Strudwick

Carla Pressman

Tenancy agreement commenced 9/1/07 Christina Papangelis Planet Bond E363224-7 Bond $1,940

17 `Clause 5 of Exhibit A1 reads as follows: "In 2003 2004 and for a few months during 2005 my daughter and her friends resided at the property. The property was managed by a real estate agent so our daughter did not have to feel responsible for the property. The agent did not have to find tenants as our daughter organised those who shared the house with her although they did pay their rent to the real estate agent."

18 It will be noted that the thrust of Exhibit A1 is that Olivia stayed at the house with friends and being presumably friends selected by her. If this is so, one has to wonder why the services of estate agents were needed. As set out in the summary, Ray White Balmain was the estate agent until succeeded by Planet Properties Petersham. The documents before the Tribunal include a standard form agency agreement in respect of the second estate agency firm which would appear to indicate that the estate agent performed the usual services in return for the usual remuneration.

19 During the relevant years and as appears from the summary the tenants were Mary Jo Dickson and others (“the Dickson group”) from May 2003 to January 2005, Joy Kyriacou and others (“the Kyriacou group”) from January 2005 to March 2006 and Kimberly Tillyer-Strudwick and another (“the Strudwick group”) from March 2006 to January 2007. As set out previously in these reasons the Tribunal was not finished with lease agreements in respect of any of the three groups. The lease agreement in respect of the tenants who took occupation of the property after the expiry of the relevant years; indicates that those tenants received a term of 13 months.

20 Although there is some inconsistency and vagueness as to precisely what rents were paid by the tenants referred to previously it seems likely that the Strudwick group paid $475 per week, the Kyriacou group paid $420 per week and the Dickson group paid a rental which was between $385 at $430 per week. (This last statement arises from the reference by the Applicant to the group who occupied the property immediately prior to the Kyriacou group.)

21 The summary indicates that all three groups of tenants provided rental bonds and more importantly each group of tenants received, when vacating the property, the return of its rental bond. The fact that each such group received the return of its rental bond indicates that that group had complied with its obligations under its lease and including as to the maintenance of the property to the extent to which it was contractually bound to do so.

22 The summary includes at page 7 information as to electricity payments. I do not think that it is necessary for me to include that content in these reasons; suffice it to say that it indicates that in respect of electricity, payments were made by the tenants and also made by the Applicant. The summary indicates that in respect of water accounts some payments were made by the tenants. It is unnecessary for me to go into detail and more particularly the detail contained in the summary because the Applicant accepted in categorical terms that in respect of each group of tenants and throughout the relevant years, the rental paid was always considerably in excess of the amount reasonably required to cover the expenses referred to in clause 8(7) (b) of the Schedule.

23 The Applicant in exhibit A1 said that he stayed in the property for six months but that period was altered on a number of occasions during the course of his evidence; it is unnecessary for me to detail the variations. The Applicant said in evidence that he and his partner stayed in the property with the Kyriacou group before that group vacated the property and for a period of 2 to 3 weeks. He also said that there was a similar period of overlap with the Strudwick group after that group came into the property in March 2006. Assuming that the Strudwick group took occupation on the date disclosed in the summary and being 13 March 2006 and assuming that the Kyriacou group vacated the property on or about 17 December 2005 and being the date on which the repayment of the relevant bond was approved, the period of occupancy by the Applicant would have commenced near the beginning of December 2005 and ended near the end of March 2006. The Applicant also spoke about coming to Sydney in November 2005 but in that event the period of residence with the Kyriacou group would have been even longer. There was no evidence as to any rent adjustment with the two tenant groups involved.. It is unnecessary to attempt to be too specific as to these aspects simply because at the commencement of the hearing the Applicant amended Exhibit A1 to reduce the period of 6 months to a period which was less than 6 months,.

24 The Applicant sought to contend that the overall rental paid by the three groups of tenants was inadequate to cover the cost of significant structural repairs (and including in particular plumbing) which as been performed and which still has to be performed. The Applicant's evidence was that the condition of the property has deteriorated over the years (and for which he blamed the first of the two estate agents in particular). He said also that there were invariably occupants of the property in excess of the number specified in the relevant group and in particular, that there were 12 occupants of the property in December 2005 when he and his partner came to Sydney. Evidence was given as to where the various occupants slept but that evidence is not adequate to indicate how there was room for 12. The Applicant’s evidence in this regard was that the property has three bedrooms but that it is possible to use the lounge room and the garage for this purpose.

25 The picture overall is of a property let to students who are perhaps do not always give the property the care and attention which might have been desired by the Applicant. It is clear though that each tenant group discharged its legal obligations since otherwise it would not have received the refund of its bond,. It is possible that the tenants were friends of Olivia and selected by her as such (although there was some brief evidence as to a dispute with one set of tenants) but it is more likely that tenants were selected by the estate agents even if they were (possibly) approved by Olivia. All of this could no doubt have been clarified by Olivia.

26 .Olivia's role in all of these arrangements is unclear. She may have played a part in the selection or approval of tenants but in the absence of evidence from her, her precise role as to what she in fact did, is not known. The Applicant said in clause 7 of Exhibit A1 that “he organised for his daughter’s friends to move out” and to enable him and his partner to move in. That statement cannot be correct given that he and his partner for a period lived in the house with the then tenants (and later with the incoming tenants). It seems likely each group of tenants made a concession as to occupation although it is also possible that there was some form of financial inducement. These are all aspects which could presumably have been clarified by Olivia. .

.

Part C: Statutory provisions, case law and commentary.

27 The evidence before the Tribunal clearly establishes that the Applicant and his partner lived in the property for about 5 months (but not 6 months) in the period from December 2005 to March 2006 and that they thereafter returned to their guest house in Darwin. They did not live in the property otherwise than on a temporary basis and so that it cannot be contended that the property was at any time in the relevant years their principal place of residence. The fact that Olivia may have lived in the property during the relevant years does not, having regard in particular to the decision in Paspaley, (referred to below) assist the Applicant. Moreover and if clause 8 of the Schedule is relevant (and it is possible that it is not) the Applicant did not on their return to the property reside in it for 6 months. However and in case it is necessary or relevant I deal in these reasons with all of the clause 8 issues canvassed at the hearing.

28 The relevant statutory provisions in respect of the principal place of residence exemption (“PPR”) were in respect of the 2003 year contained in the Act proper. They were with effect from the 2004 year reenacted in the Schedule. Although there have over the years been legislative amendments in respect of the Schedule the provisions which are specifically relevant for the purposes of this matter are in the same terms.

29 Clause 2 of the Schedule provides;:

Part 2 - Principal place of residence exemption
2 Principal place of residence exemption
(1) Land used and occupied by the owner as the principal place of residence of the owner of the land, and for no other purpose, is exempt from taxation under this Act, in respect of the year commencing 1 January 2005 or any succeeding year, if the land is:
(a) a parcel of residential land, or
(b) a strata lot or, subject to this Schedule, land comprised of 2 or more strata lots.
(2) Land is not used and occupied as the principal place of residence of a person unless:
(a) the land, and no other land, has been continuously used and occupied by the person for residential purposes and for no other purposes since 1 July in the year preceding the tax year in which land tax is levied, or
(b) in any other case, the Chief Commissioner is satisfied that the land is used and occupied by the person as the person ’s principal place of residence .
(3) If the owner of land is entitled to the exemption conferred by this clause , no other person is liable to be assessed for taxation under this Act in respect of the land during the period of the owner ’s entitlement to the exemption.
(4) The exemption conferred by this clause is referred to as the "principal place of residence exemption".
(5) The principal place of residence exemption is subject to the restrictions set out in Part 4

30 Clause 8 of the Schedule provides:

Clause 8 Concession for absences from former residence
(1) If the Chief Commissioner is satisfied that:
(a) a person is the owner of land ( "the former residence") that has been used and occupied by the person as his or her principal place of residence for a continuous period of at least 6 months, and
(b) the person uses and occupies other land (whether or not in New South Wales), that is not owned by the person , as his or her principal place of residence ,
the person is taken, for the purpose of the principal place of residence exemption, to continue to use and occupy the former residence as his or her principal place of residence .
(2) The maximum period for which a person may be taken, under this clause , to continue to use and occupy a former residence as a principal place of residence is 6 years starting at the end of the last period (of at least 6 months) during which the former residence was used and occupied by the person as a principal place of residence (not including any period for which the person may be taken, under clause 7 or this clause , to have used and occupied the former residence as a principal place of residence ).
(3) If the principal place of residence exemption applies to the former residence of a person by operation of this clause , the exemption ceases to have effect if the person is the owner of the former residence at the end of the 6-year period referred to in subclause (2) and fails:
(a) to resume actual use and occupation of the residence as a principal place of residence by the end of that period, and
(b) to continue that use and occupation for at least 6 months.
(4) Any period during which a person is in full time care is not to be counted toward the maximum period referred to in subclause (2). Accordingly, a person who is in full time care may continue to be taken to use and occupy his or her former residence as his or her principal place of residence during any period in which he or she is in full time care.
(5) For the purposes of this clause , a person is in "full time care" during any period in which the person :
(a) resides at a hospital or mental hospital as a patient of the hospital, or
(b) resides at an aged care establishment (within the meaning of section 10R) while being provided with residential care, or respite care, or
(c) resides with another person (a "carer") who is eligible for a carer payment under the Social Security Act 1991 of the Commonwealth because the carer provides care to the person .
(6) This clause applies in respect of the assessment of a person ’s ownership of land in a tax year only if the Chief Commissioner is satisfied that no income has been derived from the use or occupation of the former residence in the preceding tax year , except as permitted by subclause (7).
(7) Income may be derived from the use or occupation of the former residence in a tax year if:
(a) the income is derived from a lease, licence or other arrangement under which a person has a right to occupy the former residence and the total period for which any such right of occupation is conferred does not exceed 6 months in the tax year , or
(b) the income is derived from any arrangement under which a person occupies the former residence, but the income is no more than is reasonably required to cover council, water and energy rates and charges and maintenance costs of the owner in respect of the residence.
(8) This clause is subject to clause 12 (which limits members of a family to one principal place of residence exemption).
(9) In this clause :
"hospital" means an institution at which relief is given to sick or injured people through the provision of care or treatment.
"mental hospital" means an institution conducted principally for the treatment of mentally ill persons , and includes a hospital within the meaning of the Mental Health Act 1990

31 Clause 12 of the Schedule provides

12 Only one principal place of residence for all members of same family
(1) For the purposes of the principal place of residence exemption, only one place of residence may be treated as the principal place of residence of all members of the same family.
(2) If members of a family own (whether jointly or separately) more than one residence used and occupied by any of them as a principal place of residence , the Chief Commissioner is to treat the one place of residence elected as the principal place of residence of the family as the principal place of residence of all members of the family in respect of a tax year .
(3) Such an election is to be made, by or on behalf of the members of the family, in writing and must be lodged with the Chief Commissioner within the period for the lodging of objections under section 89 of the Taxation Administration Act1996 .
(4) An election may be made, in respect of a tax year , by the end of the period allowed for the lodging of an objection to a notice of assessment of land tax liability (being an initial assessment of land tax liability) for that tax year .
(5) If an election is not made, the Chief Commissioner is to treat the residence that has the highest land value for land tax purposes as the principal place of residence of all members of the family.
(6) For the purposes of this clause , a "family" consists of the following:
(a) a person and his or her spouse (if any),
(b) any dependent child or dependent step-child of the person and his or her spouse (or of either of them) who ordinarily resides with the person or his or her spouse.
(7) A person is the "spouse" of another person if:
(a) they are legally married, or
(b) they are living together as a couple in a de facto relationship within the meaning of the Property (Relationships) Act1984 .
(8) However, if the Chief Commissioner is satisfied that a person :
(a) is legally married to another person but not cohabiting with that other person , and
(b) has no intention of resuming cohabitation with that other person ,
the person is not to be regarded as the spouse of that other person and if a dependent child or dependent step-child of the person has a joint interest in the principal place of residence of the spouse, that interest is to be disregarded.
(9) A person who is the child or step-child of another person is a "dependent child" or a "dependent step-child" if the person is under 18 years of age and is not legally married.
(10) Nothing in this clause prevents more than one residence from being treated as the principal place of residence of members of a family under clause 7 (Concession for sale of former principal place of residence ).

32 It is convenient to deal firstly with clause 12 of the Schedule. Let me if only as a hypothesis assume in favour of the Applicant that Olivia lived in the property throughout the relevant years, although as these reasons make clear, there is no real or clear evidence to this effect. It must be remembered that the property was the only property owned by the Applicant in New South Wales and so that the right of election contained in subclause (2) was not relevant. Olivia was not during the relevant years a dependent as defined in subclause (9) and accordingly she did not form a part of the Applicant's family as referred to in subclause (6) for this purpose. In any event the Applicant cannot succeed in respect of this particular aspect having regard to the decision of the Court of Appeal in Chief Commissioner of State Revenue v Paspaley [2008] NSWCA 184 (7 August 2008) which is in point and decisive; clause 57 of that decision reads as follows;

An alternative approach, which might have been relied upon by the respondent, was that the property was the principal place of residence of his daughter, who had no other ordinary place of residence. However, this approach would also misconceive the nature of the exemption, which can only apply to land used and occupied “by the owner” as his or her principal place of residence: Schedule 1A, cl 2(1). The exemption does not identify, expansively, land used and occupied by the owner ‘or any member of his or her family’; the reference, in cl 12 only, to membership of the family is restrictive, rather than expansive. The respondent can only succeed if he persuades the Chief Commissioner that the property is his principal place of residence; because he can only have one principal place of residence, no question of election arises.

33 The Applicant claims that because he was resident in the property at midnight on 31 December 2005 he is entitled to succeed presumably although not specifically so stated in respect of at least the 2006 year. . However and in respect of that year clause 2(2)(a) of the Schedule is not satisfied even in respect of the 2006 year and because he had not been resident in the property as his PPR since the preceding 1 July.

34 It will be remembered that Ms Dickstein contended that clause 2(2) (b) of the Schedule confers a general discretion on the Chief Commissioner. It does not; it is a narrow discretion and its position in clause 2 indicates that it applies in particular in a situation where a taxpayer cannot satisfy the requirements of 2(2) (a) and because he has not occupied property as his PPR since the preceding 1 July. The exercise of the discretion is often sought where property is acquired and lived in as the taxpayer’s PPR from and after a date which is before the relevant 31 December but after the preceding 1 July. In this case of course the Applicant was living in Darwin until the middle of December.2005

35 But apart from any other considerations there is a base requirement and that is that the taxpayer is living in the property at the 21 December relevant as his PPR. Yen-Cheng Chuang & Anor v Chief Commissioner of State Revenue [2009] NSWADT `60 provides a summary of the applicable principles in determining whether a property constitutes an owner’s principal place of residence. as follows:

19 The Act does not provide any technical or legal meaning for the expression “principal place of residence” and accordingly, the expression has its ordinary meaning. A person’s place of residence is usually understood as “the place where he eats, drinks and sleeps” (per Ridley J in Stoke-On-Trent Borough Council v Cheshire County Council [1915] 3 KB 699 at 706). The use of the term “principal” in the expression suggests that a person may use and occupy more than one residence but that the exemption is only available for the principal place of residence of the person.

20 In ascertaining whether a particular residence of a person is the principal place of residence of that person it is necessary to use an objective test and the conclusion is determined by considering the extent and quality of use and occupation of the residence in each case (per Fryberg J in Dean v Commissioner of Stamp Duties (Qld)(No 2) [1996] 2 Qd R 557 in considering the meaning of the expression “principal place of residence” found in the Stamps Act
1894 (Qld)).

21 The onus to establish one’s principal place of residence is usually discharged on the basis of various matters. It is important to note, as observed by the Victorian Civil and Administrative Tribunal in Re Ziino and Commissioner of State Revenue [2004] VCAT 1707 that:
“… while sleeping by itself in a place can be an indication of a principal place of residence, it is not the sole matter to be taken into account. One needs to look at a whole indicia of matters …One needs to look as well at where the Applicant ate; his use of electricity and the furniture and fittings and other matters such as entertainment of friends in the house… Sleeping in a place does not make a residence. It has got to be the whole indicia of things that are done in a home which are described in the cases…”


22 Other indicia of matters would include evidence of an Applicant’s use of the address of the property as the residential address for purposes of his or her mail, driving licence, on the electoral roll, in immigration records, income tax returns and telephone bills.

23 In Chief Commissioner of State Revenue v Ferrington (GD) [2004] NSWADTAP 41 the Appeal Panel of the Tribunal agreed that “to occupy a home as his or her principal place of residence a person’s occupation must have a degree of permanence to it: a connection to a place of residence of a transient, temporary, contingent or passing nature is not sufficient, nor occupation for any other reason”. The Appeal Panel also held that “the intention of the person concerned, gauged objectively, is relevant but not determinative of the issue”. (Also see Zakariya v Chief Commissioner of State Revenue [2003] NSWADT 26).

36 , Moreover the discretion in Clause 2(2) (b) is limited in the manner described in Aldridge's case.... In Chief Commissioner of State Revenue v Aldridge & Anor (RD) [2003] NSWADTAP 50 at [26]., the Appeal Panel. referring to the former s 3(3)(b) which is in almost identical terms to cl 2(2)(b) said:

Section 3(3)(b) of the Act does not confer a true discretion on the Chief Commissioner. If the factual circumstances supports that a particular parcel of land or a flat is used and occupied by a person as the person’s principal place of residence (as defined in section 3(1) of the Act) as at midnight on 31 December in a particular year, the Chief Commissioner must be “satisfied” of that fact. If the factual circumstances do not support that a particular parcel of land or a flat is used and occupied by a person as the person’s principal place of residence as at midnight on 31 December in a particular year, the Chief Commissioner cannot be “satisfied” of that fact.

37 As set out previously the property was acquired not after the preceding 1 July but in 1985; however and as at the preceding 1 July and indeed on the 31 December 2005 it was not occupied by the Applicant as his PPR..

38 It is important in relation to clause 8 of the Schedule to note that it operates as a concession and that the concession is revoked after the 6 year period referred to in clauses 8(2) and 8(3) of the Schedule.. There may then in this case be an initial question as to whether the clause 8 concession had been revoked. for this reason. This will depend on when precisely the Applicant went to the Northern Territory and took up residence there. If this occurred in 1997 clause 8 cannot apply in respect of the relevant years, because the 6 year period referred to in clauses 8(2) and 8(3) will have expired..It is possible that the clause 8 concession fails at the outset but the Tribunal is not aware of the correct position and thus deals with the other clause 8 issues.

39 Clause 8 also provides that the former residence must be again used as the PPR within 6 years and then for a period of at least 6 months; (Clause 8(3) (b)). As has been demonstrated the period in question and during which the Applicant and his partner lived in the property between December 2005 and March 2006 was (as was conceded) less than 6 months.

40 Moreover the concession in clause 8 of the Schedule applies in respect of a land tax year only where the Chief Commissioner is satisfied that no income is derived from the use and occupation of the former residence in the preceding tax year otherwise that as provided in subclause (7).

41 In this instance the Applicant cannot comply with either of the two limbs of clause 8(7) of the Schedule. Under paragraph (a) the total period in respect of any right of occupation of the tenant cannot exceed 6 months. In this instance and without sight of the relevant leases the Tribunal does not know whether any of the tenant groups did have a lease for more than 6 months although it seems likely that each of them did. That each tenant group received a term in excess of 6 months is likely having regard to the amounts of the bonds provided and having regard to the fact that the one lease available to the Tribunal granted (after the relevant years) a term of 13 months. In order to demonstrate a right under this paragraph the Applicant was obliged to produce the leases and he did not do so thus failing in this (and other respects) to discharge the onus. Paragraph (b) cannot be satisfied because the Applicant derived rental income while he was in Darwin for more than 6 months in each of the relevant years and in each case the rental derived was far in excess of the limit prescribed by clause 8(7)(b) of the Schedule. The evidence of the Applicant as to the need for structural repairs (not specified as to amounts or particular repairs) is not in this context relevant.

42 The Tribunal finds in any event on the evidence presented to it, that when the Applicant and his partner obtained accommodation (and accommodation which was temporary) in the property in December 2005 they did not occupy the property as their PPR. I use the word "accommodation” in this context because the fact that the property was again leased to tenants and in March 2006 indicates that the Applicant and his partner had no intention of remaining in the property and indeed they returned to Darwin and where as set out previously they own and run a guest house and the Applicant runs a consultancy.

Part D Interest.

43 Interest was originally imposed in respect of all of the years referred to in clause 1 at both the market rate and also the premium rate. However the Chief Commissioner elected to remit the premium rate in full a decision which appears in all the circumstances to have been generous. The law as to the market rate is clear; interest at the market rate compensates the Chief Commissioner for the fact that he did not receive the tax when it was due. In accordance with the decision of the Appeal Panel of this Tribunal in Chief Commissioner of State Revenue v Incise Technologies Pty Ltd [1004] NSWADTAP 19 market rate interest is not remitted except where the Chief Commissioner is at fault. There is no suggestion of fault on the part of the Chief Commissioner .in this matter.

Part E Conclusion

44 The evidence of the Applicant was as I have said vague. It was in its written form tailored in an attempt to bring the Applicant within the PPR legislation and was in important respects incorrect. The Applicant bears the onus and it is clear that it has not been discharged. .

45 The end result it that the Applicant cannot succeed in respect of any of the relevant years and is not entitled to a further interest remission in respect of any of the years referred to in clause 1. In the circumstances the decision under review must be affirmed.