KHIANI & COMMISSIONER FOR ACT REVENUE (Administrative Review)
[2013] ACAT 55
•19 August 2013
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
KHIANI & COMMISSIONER FOR ACT REVENUE
(Administrative Review) [2013] ACAT 55
AT 13/03
Catchwords: ADMINISTRATIVE REVIEW – duty payable on purchase of property – whether the applicant met the eligibility requirements under pensioner duty concession scheme – whether the property was purchased “in the same name/s the property being sold” – interpretation of the criterion: ordinary meaning, and meaning that would best achieve the purpose of the Act – purpose of minimising the opportunities for taxpayers to claim more than one concession – whether the pensioner duty concession instrument permits a decision maker to exercise discretion
List of Legislation: ACT Civil and Administrative Tribunal Act 2008, s 105
Human Rights Act 2004, ss 8, 12, 30 and 40B
Legislation Act 2001, ss138, 139 and 145
List of Regulations: Taxation Administration (Amounts Payable—Eligibility—Pensioner Duty Concession Scheme) Determination 2011
(No 1) – DI2011-136, ss 4 and 6Taxation Administration (Amounts Payable—Eligibility—Home Buyer Concession Scheme) Determination 2011 (No 1) - DI2011-162
List of Cases: Cooper Brookes (Wollongong) Pty Ltd v Commissioner of Taxation (Cth) (1981) 147 CLR 297
Maritime Services Board of New South Wales v Posiden
Navigation Inc [1982] 1NSWLR 72Minister for Immigration and Citizenship v Li [2013] HCA 18
Project Blue Sky v Australian Broadcasting Authority
(1998) 94 CLR 355
List of Texts/Papers: Explanatory Statement for the Taxation Administration
(Amounts Payable - Eligibility – Pensioner Duty Concession
Scheme) Determination 2008 (No 1) – DI2008-78
Explanatory Statement for the Taxation Administration
(Amounts Payable - Eligibility - Pensioner Duty Concession
Scheme) Determination 2008 (No 2) – DI2008-288;
Explanatory Statement for the Taxation Administration
(Amounts Payable - Eligibility - Pensioner Duty Concession
Scheme) Determination 2009 (No 1) - DI2009-111Explanatory Statement for the Taxation Administration
(Amounts Payable-Eligibility-Pensioner Duty Concession
Scheme) Determination 2009 (No 2) – DI2009-246Explanatory Statement for the Taxation Administration
(Amounts Payable—Eligibility—Pensioner Duty Concession
Scheme) Determination 2010 (No 1) – DI2010-110Explanatory Statement for the Taxation Administration
(Amounts Payable—Eligibility—Pensioner Duty Concession
Scheme) Determination 2010 (No 2) – DI2010-308Explanatory Statement for the Taxation Administration (Amounts Payable—Eligibility—Pensioner Duty Concession
Scheme) Determination 2011 (No 1) – DI2011-136
Tribunal: Professor Spender – Presidential Member
Date of Orders: 19 August 2013
Date of Reasons for Decision: 19 August 2013
AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) AT 13/03
BETWEEN:
ANITA KHIANI
Applicant
AND:
THE COMMISSIONER FOR ACT REVENUE
Respondent
TRIBUNAL: Professor P. Spender – Presidential Member
DATE: 19 August 2013
ORDER
The Tribunal Orders that:
1.The decision under review is confirmed.
………………………………..
Professor P. Spender
Presidential Member
REASONS FOR DECISION
INTRODUCTION
The reasons below explain why the Tribunal has concluded that the respondent's decision should be confirmed.
BACKGROUND
Prior to 2008, the applicant and her then husband resided at a property in Crisp Circuit Bruce (the matrimonial home or matrimonial property). Following the separation of the applicant and her husband, orders were made on 14 January 2008 under the Family Law Act 1975 (Cth) for the matrimonial home to be listed on the market for sale.[1]
[1] Tribunal documents at page T51- T53
During 2010, the applicant applied for a Disability Support Pension and following a review completed on 22 March 2011, she was regarded by Centrelink as eligible to be paid the Disability Support Pension at the single rate from 19 January 2011. The relevant officer of Centrelink considered that the applicant was living separate and apart from her husband on a permanent or indefinite basis, and that the relationship had completely broken down.[2] Therefore, the applicant was regarded by Centrelink as not being a member of a couple pursuant to section 4(3) of the Social Security Act 1991 (Cth).
[2] Tribunal documents at page T79
After further court proceedings, orders were made by the Federal Magistrates Court on 15 April 2011 that the applicant’s husband be appointed as trustee for the sale of the matrimonial home, and he was authorised to enter into a contract for sale of the matrimonial home upon such terms as advised by the solicitors acting upon the sale. The husband was required to advise the applicant of the details of the sale including the price and completion date but, pursuant to section 106A of the Family Law Act 1975 (Cth), the Registrar of the Federal Magistrates Court was appointed to execute all documents in the name of the applicant which were necessary or convenient to give effect to the sale.[3]
[3] Tribunal documents at pages T89 - T90
On 17 June 2011, a contract for sale of the matrimonial home was executed. The copy of the contract of sale, which was later provided to the respondent, had a notation as follows
‘no certified copy available due to family law issues’.[4]
[4] Tribunal documents at page T30
However, on the same day, 17 June 2011, a transfer was executed for the sale of the matrimonial home and it was signed on behalf the applicant by the Registrar of the Federal Magistrates Court. A notation on the transfer stated as follows:
‘signed by ... Registrar under section 106A of the Family Law Act 1975 pursuant to orders made by ... on 15th April 2011, a copy of which is attached, on behalf of the transferor Anita Khiani.’[5]
[5] Tribunal documents at page T32
On 12 July 2011, the applicant was required by order made in the Federal Magistrates Court to vacate the matrimonial home by 13 July 2011.[6] On that day, she left the matrimonial home with a child and took up residence at a motel on a temporary basis.[7]
[6] Tribunal documents at page T91
[7] Tribunal documents at page T91
Sometime later, the applicant found a property in Bruce (the subject property) that she wished to acquire. On 28 July 2011, she completed a Pensioner Duty Concession Scheme (PDC Scheme) Application Form and submitted it to the respondent on 3 August 2011.[8]
[8] Tribunal documents at page T36
On 2 August 2011 the applicant entered into a contract for sale to purchase the subject property but on 4 August 2011 the respondent issued a Notice of Assessment which assessed the duty payable on the property as $17,200.[9] In a letter to the applicant dated 10 August 2011, the respondent explained that the applicant was not eligible for payment of the Pensioner Duty Concession (PDC) because she had not met the criteria for eligibility.[10] The letter explained that the PDC Scheme was designed
to assist eligible pensioners to move to accommodation more suited to their needs (e.g. from a house to a townhouse) but who may find the duty involved to be a significant impediment. Such persons are assisted to purchase a residential home or residential vacant land by paying duty at a concessional rate.[11]
[9] Tribunal documents at page T33
[10] Tribunal documents at page T43
[11] Tribunal documents at page T43
The criteria for the PDC at that time were set out in the Taxation Administration (Amounts Payable—Eligibility—Pensioner Duty Concession Scheme) Determination 2011 (No 1) - DI2011-136 (the PDC Instrument).
The respondent considered that the applicant did not comply with section 6(1) of the PDC Instrument. This provision states:
(1) To be eligible for the scheme, ownership of the property being purchased must be in the same name/s as the property being sold.
Although there was no doubt that the applicant satisfied the other eligibility requirements under the PDC Instrument, the respondent considered that she was not eligible for the PDC concession because the ownership of the property that was being sold (the matrimonial home) was in two names - the name of the applicant and her then husband - whereas the subject property that she was purchasing was solely in her name.
On 16 August 2011, the applicant made a separate application for a Home Buyer Concession (HBC) under the Home Buyer Concession Scheme (HBC Scheme).[12] The relevant instrument for the HBC Scheme is the Taxation Administration (Amounts Payable—Eligibility—Home Buyer Concession Scheme) Determination 2011 (No 1) - DI2011-162 (the HBC Instrument). The respondent granted the HBC and this reduced the applicant’s stamp duty by a sum of $2648.[13]
[12] Tribunal documents at pages T45-T48
[13] Tribunal documents at page T71
On 6 September 2011, the applicant lodged an objection to the respondent's decision[14] regarding her ineligibility for the PDC and on 20 December 2012 the applicant was advised that her objection had been disallowed.[15] In disallowing the objection, the relevant officer of the respondent made the following comments:
In making this determination I have examined copies of the Contracts for Sale as provided by the taxpayer and it is evident that names delineating ownership are not consistent between the two documents. Additionally, I have also reviewed the transfer documents which indicate the same discrepancy.
Whilst I empathise with the taxpayer regarding the difficult circumstances she has experienced, ultimately leading to the sale of the property, it is a question of fact as to whether she is an ‘eligible buyer’ for the purposes of the Scheme, and regrettably she is not.
In this case, the Commissioner does not have discretion to approve a PDC under the scheme where the applicant does not satisfy the eligibility criteria set out in DI 2011-136 and, thus, it is not open for me to allow the taxpayer’s objection.[16]
[14] Tribunal documents at page T73
[15] Tribunal documents at pages T8-T13
[16] Tribunal documents at page T12
On 14 January 2013, the applicant lodged an application with the Tribunal for review of the decision made by the respondent on 20 December 2012. Following a series of directions hearings, the filing of facts and contentions and submissions by the parties, the Tribunal conducted a hearing in this matter on 24 May 2013. At that hearing, the applicant represented herself and Ms Bayer of the ACT Government Solicitors Office represented the respondent.
THE LEGAL FRAMEWORK
The PDC Scheme is a scheme administered by the respondent. The respondent’s web page describes the scheme as assisting ‘eligible pensioners who move to accommodation more suited to their needs (for example, moving from a house to a townhouse) by charging duty at a concessional rate’.[17]
[17]
The relevant provision of the PDC Instrument that the respondent relied upon to find that the applicant was ineligible for the PDC was section 6. At the time of the respondent’s decision, section 6 was a new provision that applied from 1 July 2011. It stated as follows:
6 Other Eligibility Criteria
(1) To be eligible for the scheme, ownership of the property being purchased must be in the same name/s as the property being sold.
(2) The concession is available where at least one owner of the existing property is an eligible pensioner and all other criteria are satisfied.
(3) An applicant is limited to no more than one concession for this scheme.
THE PARTIES’ SUBMISSIONS
The Applicant’s Submissions
The applicant contended that she had no control as to how the matrimonial property was sold. Further, she argued that because she was separated under the one roof in the matrimonial home, the Tribunal should take this into account and regard her as a single person and, in particular, consider the circumstances in which the property was sold i.e. by court order with her husband acting as trustee and the Registrar of the Federal Magistrates Court signing on her behalf which meant she played no positive role in the execution of the contract for sale or the transfer of the matrimonial property. The applicant contended that the Tribunal, standing in the shoes of the respondent, should take these circumstances into account when interpreting and applying section 6(1) of the PDC Instrument.
Relying upon the statements made by the High Court in Minister for Immigration and Citizenship v Li,[18] the applicant argued that the Tribunal should take a flexible approach and interpret its power broadly. In particular, the Tribunal should to take all of the circumstances into account and consider the real situation when exercising the power that is conferred by the PDC Instrument instead of treating her as having a domestic partner at the time that the sale of the matrimonial property occurred.
[18] [2013] HCA 18
The applicant stated that the effect of the sale of the matrimonial home is that she did downsize into a smaller property which is more suitable for her needs, particularly as regards her health.
The Respondent’s Submissions
Conversely, the respondent argued that section 6(1) of the PDC Instrument creates mandatory criteria for eligibility for the PDC. The respondent stated that the primary rule of statutory interpretation is that words must prima facie be given their ordinary meaning[19] and the ordinary meaning of section 6(1) of the PDC Instrument requires that the ownership of the property being purchased must be in the same name/s as the property being sold. This can only be interpreted to mean that the name or names in which the titles of both properties are held are identical. That is, where the title to the sold property was held in one person's name, the newly purchased property must be in that person's name for the criterion in section 6(1) to be met. Similarly where the title to the sold property was held in two persons’ names, the newly purchased property must be in those two persons’ names for the criterion in section 6(1) to be met. The respondent said that this interpretation of the provision is consistent with section 145(b) of the Legislation Act 2001 which states that words in singular number include the plural and words in the plural include the singular.
[19]Maritime Services Board of New South Wales v Posiden Navigation Inc
[1982] 1 NSWLR 72 at 86
While this interpretation may not favour the applicant, the respondent submitted that that of itself is not a reason to alter the interpretation of the provision.[20] The PDC Scheme is designed to encourage eligible pensioners to downsize their family home without incurring a burdensome stamp duty liability. The respondent argued that section 6(1) of the PDC Instrument ensures that only eligible buyers receive the concession. It prevents the situation where, for instance, joint owners of a property sell that property, then both individuals purchase separate properties and individually claim the PDC, potentially entitling both of them to pay stamp duty at the concessional rate.
[20] Cooper Brookes (Wollongong) Pty Ltd v Commissioner of Taxation (Cth) (1981) 147 CLR 297; at page 304 - 305:
The respondent further argued that the applicant’s arguments were effectively inviting the Tribunal to treat section 6(1) as conferring a discretion and the Tribunal would fall into error if it adopted that approach. Rather, said the respondent, the clear terms of section 6(1) do not confer a discretion. In this respect, section 6(1) of the PDC Instrument should be distinguished from section 363 of the Migration Act 1958 (Cth), which was considered by the High Court in Minister for Immigration v Li.[21] That provision conferred a discretion upon the relevant tribunal by the use of the word "may", which allowed the tribunal to exercise a discretion to adjourn the review from time to time.
CONSIDERATION
[21] Minister for Immigration and Citizenship v Li [2013] HCA 18
In working out the meaning of an Act, the Tribunal is required to adopt an interpretation that would best achieve the purpose of the Act.[22]
[22] Section 139 Legislation Act 2001
The Tribunal must rely upon the evidence led by the respondent as to the purpose of the PDC Instrument. No extrinsic material was provided by the respondent which explains the purpose of the PDC Scheme. The respondent provided the Explanatory Statement to the PDC Instrument[23] but the Explanatory Statement does not explain the purpose of the PDC Scheme and in relation to the relevant provision (section 6(1) of the PDC Instrument), the Explanatory Statement merely repeated the text of the provision. The Tribunal has examined each of the Explanatory Statements of the predecessors to the PDC Instrument, that is, the Disallowable Instruments that implemented the PDC Scheme from its inception in May 2008.[24] None of the Explanatory Statements explain the purpose of the PDC Scheme.[25]
[23] Taxation Administration (Amounts Payable—Eligibility—Pensioner Duty Concession Scheme) Determination 2011 (No 1), Explanatory Statement, 23 June 2011
[24] DI2008-78, notified 6 May 2008
[25] See Explanatory Statements for the Taxation Administration (Amounts payable - Eligibility – Pensioner Duty Concession Scheme) Determination 2008 (No 1) – DI2008-78; Taxation Administration (Amounts payable - Eligibility - Pensioner Duty Concession Scheme) Determination 2008 (No 2) – DI2008-288; Taxation Administration (Amounts Payable - Eligibility - Pensioner Duty Concession Scheme) Determination 2009 (No 1)- DI2009-111; Taxation Administration (Amounts Payable-Eligibility-Pensioner Duty Concession Scheme) Determination 2009 (No 2) – DI2009-246; Taxation Administration (Amounts Payable—Eligibility—Pensioner Duty Concession Scheme) Determination 2010 (No 1) – DI2010-110; and Taxation Administration (Amounts Payable—Eligibility—Pensioner Duty Concession Scheme) Determination 2010 (No 2) – DI2010-308
However, the text of the PDC Instrument and the comments made in the Explanatory Statement are consistent with the purpose put forward by the respondent. The text of the PDC Instrument indicates that providing a stamp duty concession to eligible pensioners may encourage them to downsize their homes to smaller premises. The thresholds in the PDC Instrument indicate that eligible properties under the scheme will generally be smaller residential properties.[26]
[26] Section 4(13), Taxation Administration (Amounts Payable—Eligibility—Pensioner Duty Concession Scheme) Determination 2011 (No 1) - DI2011-136
As noted above, Section 6(1) of the PDC Instrument was a new provision which applied from 1 July 2011. The previous PDC instrument DI 2010-308 did not contain such a provision. There is no material from which the Tribunal can glean the purpose of this provision although the Tribunal is satisfied that the provision may operate to minimise opportunities for taxpayers to split the sale and purchase of properties and therefore claim more than one concession. This in part explains why section 6(3) of the PDC Scheme (which states that an applicant is limited to no more than one concession for the scheme) was enacted at the same time.
However, the mischief which section 6(1) seeks to eradicate is not present in the current case. Rather there has been a sale of the matrimonial property by a court order and no indication that there has been any profiteering by the applicant.
How should the Tribunal interpret section 6(1) of the PDC Instrument? The current drafting gives rise to some variations in interpretation because of the interaction between the phrase ‘same name/s’ and section 145 of the Legislation Act gives rise to multiple singular and plural interpretations of the phrase. The question is whether the respondent's argument that section 6(1) requires that the names be identical is correct. Considering the purpose of the PDC Instrument, which is to create incentives for pensioners to downsize their premises, it would be appropriate to adopt the interpretation that best promotes that purpose. Moreover, the Legislation Act requires that the Tribunal not adopt an interpretation that is absurd or unreasonable.[27] Taking these considerations into account, the Tribunal considers that the phrase ‘same name/s’ in section 6(1) of the PDC Instrument should be interpreted to mean identical names.
[27] Section 138(c) Legislation Act 2001
In coming to this conclusion the Tribunal has taken into account the context of section 6(1), that is, the whole of the PDC Instrument.[28] It also takes into account the fact that other comparable instruments such as the HBC Instrument create a special category of eligibility where a property is being sold pursuant to a court order.[29] In the case of the HBC Instrument, the author of the instrument has expressly taken into account the circumstances that apply where a property has been sold pursuant to a court order in creating eligibility requirements that are specific to that circumstance. There are no such eligibility requirements in the PDC Instrument.
[28] Project Blue Sky v Australian Broadcasting Authority (1998) 94 CLR 355
[29] Section 5(1)(d)(i)A Taxation Administration (Amounts Payable—Eligibility—Home Buyer Concession Scheme) Determination 2011 (No 1) - DI2011-162
Importantly, section 6(1) of the PDC instrument does not confer a discretion upon the respondent, nor the Tribunal standing in the shoes of the respondent, to waive the requirements of the ‘same name/s’. Therefore, the provision operates strictly. In this case the ownership of the property being purchased (the subject property) was not the same as the property being sold (i.e. the matrimonial home) because the matrimonial home was in the name of the applicant and her then husband, whereas the subject property was in the applicant’s name only. Therefore, the applicant does not satisfy the eligibility requirements under section 6(1) and the PDC Instrument generally.
In exploring the interpretation of section 6(1), the Tribunal considered whether other interpretive obligations arose, for example, under section 30 of the Human Rights Act 2004 due to the engagement of rights under the same Act i.e. section 8 (right to equality before the law) or section 12 (right to not have one’s home arbitrarily interfered with). However, the Tribunal has concluded that these rights have not been engaged in the particular circumstances of this case and therefore there are no grounds upon which an alternative interpretation was mandated by the combined operation of sections 30 and 40B of the Human Rights Act 2004.
The Tribunal must make decisions according to law,[30] however, it recognises, as did the respondent at first instance, that section 6(1) operates harshly when applied to the circumstances of the applicant. The Tribunal therefore requests the respondent to consider the long-term operation of the PDC Scheme and whether section 6(1) of the PDC Instrument operates equitably for present and future taxpayers who find themselves in the situation of the applicant.
[30] Section 105 ACT Civil and Administrative Tribunal Act 2008
………………………………..
Professor P. Spender
Presidential Member
PUBLICATION DETAILS
TO BE PUBLISHED
To be completed by Tribunal Staff
PART A
FILE NUMBER: | AT 13/03 |
PARTIES, APPLICANT: | ANITA KHIANI |
PARTIES, RESPONDENT: | COMMISSIONER FOR ACT REVENUE |
SOLICITORS FOR RESPONDENT | ACT Government Solicitors |
TRIBUNAL MEMBERS: | Professor P. Spender Presidential Member |
DATES OF HEARING: | 24 May 2013 |
PLACE OF HEARING: | Canberra |
PART B
RECOMMENDATION:
FULL REPORT ( ) CASE NOTE ( ) UNREPORTED DECISION ( )
COMMENTS:
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