Lamir-Pike v Chief Commissioner of State Revenue

[2025] NSWCATAD 169

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Lamir-Pike v Chief Commissioner of State Revenue [2025] NSWCATAD 169

Hearing dates:

8 May 2025

Date of orders:

15 July 2025

Decision date:

15 July 2025

Jurisdiction:

Administrative and Equal Opportunity Division

Before:

J Sullivan, Senior Member

Decision:

(1) An extension of time to 19 November 2024 is granted for the filing of the application to the Tribunal under s 99(1) of the Taxation Administration Act 1996 (NSW).

(2)   The assessment to duty, interest and penalty tax is affirmed.

Catchwords:

TAX AND REVENUE – Whether “eligible transaction” for a duty exemption – existing house and shed on land when purchased - existing house rented to tenants – existing shed converted so owner could live there while building a new home on the land – no occupation certificates or approvals for existing house or shed as converted

Legislation Cited:

Administrative Decisions Review Act 1997 (NSW)

Civil and Administrative Tribunal Act 2013 (NSW)

Duties Act 1997 (NSW)

Environmental Planning & Assessment Act 1979 (NSW)

Taxation Administration Act 1996 (NSW)

Cases Cited:

Chief Commissioner of State Revenue v Incise Technologies Pty Ltd & Anor (RD) [2004] NSWADTAP 19

Cornish Investments Pty Limited v Chief Commissioner of State Revenue (RD) [2013] NSWADTAP 25

Golden Age and Hannas the Rocks Pty ltd v Chief Commissioner of State Revenue [2024] NSWSC 249

Cornish Investments Pty Limited v Chief Commissioner of State Revenue (RD) [2013] NSWADTAP 25

Texts Cited:

None

Category:

Principal judgment

Parties:

Erik Lamir-Pike (Applicant)
Chief Commissioner of State Revenue (Respondent)

Representation:

Applicant (Self-represented)

Counsel:
C Chiam (Respondent)

Solicitors:
Crown Solicitor (Respondent)

File Number(s):

2024/00431280

Publication restriction:

None

REASONS FOR DECISION

Overview and issues

1. The Applicant bought a 40 acre property at Bellingen in August 2019. There was an existing house (“Existing House”), a large shed (“Shed”), and a caravan (with annex) (“Caravan”) on the property when he purchased it.

2. He claimed, and received, a full exemption from duty under the First Home Buyers Assistance Scheme (“the Scheme) in the Duties Act 1997 (NSW) (“Duties Act”). The nature of the Scheme is described in s 69 of the Duties Act as being “intended to help people who are acquiring their first home”.

3. After the property was acquired, the Applicant never lived in the Existing House. He rented that out from August 2019 to April 2022. He also rented out the Caravan to another person. The Applicant did some work converting part of the Shed into his own residence and used the rest of the Shed to store some business equipment.

4. The Applicant says that he occupied the Shed as his principal place of residence, and started to build a new house on the land (“New House”). He did a lot of the work himself. He said that he lived in the Shed from 15 August 2019 until April 2022, when he moved out of the Shed to live in the New House. He is still finishing it off.

5. Following an investigation, the Respondent reversed the exemption, and assessed the Applicant to duty, interest and 25% penalty tax on 9 April 2024. That is the decision that is under review in these proceedings.

6. The questions are:

1. Was there an “eligible” agreement or transfer for the purpose of s 74(1) of the Duties Act, in circumstances where there were no occupation certificates or Council approvals ever granted in respect of the Shed, or for the Existing House;

2. Whether the transaction “involve[d] the acquisition of a business or business premises” and was therefore not eligible for the exemption under s 75(1) of the Duties Act;

3. Whether the Applicant satisfied the residence requirement in s 76 of the Duties Act;

4. If not, whether the Tribunal has a discretion to waive the requirements of the Duties Act; and

5. If not, whether the Tribunal should exercise its discretion to remit interest and/or penalties in whole or in part.

Materials before the Tribunal

7. The Applicant filed his application to the Tribunal (A1), and a further bundle of documents (A2) which included a statutory declaration of the tenant of the House, Luke Bond (Mr Bond), and tendered a letter from his accountant dated 7 May 2025 at the hearing (A3).

8. The Respondent filed documents required under s 58 of the Administrative Decisions Review Act 1997 (NSW) (“ADR Act”) (R2), a further tender bundle (R2), and written submissions (R3). At the hearing, the Respondent also provided a bundle of authorities (R4) and an aerial photograph of the land which was contained in R2 but marked to identify the various structures on the land discussed below (R5).

Background to these proceedings

The Investigation by the Respondent

9. Following a notice of investigation sent to him by the Respondent on 16 February 2024, the Applicant provided a Residence Declaration dated 19 February 2024:

1. he ticked the boxes acknowledging that: (a) he understood the requirement to “occupy the home as [his] principal place of residence for a continuous period of at least 6 months, commencing within 12 months of settlement …”; (b) he understood that if the residence requirement had not been met, he could be required to repay the first home benefits received which may include penalty tax and/or interest; and (c) he could be liable for substantial penalties for making false or misleading statements.

2. he answered that he started residing in the property on 15 August 2019 and was still living in the property; and

3. he listed the names of the tenants who occupied the Existing House and the Caravan.

10. On 9 April 2024, the Respondent:

1. determined that the Applicant did not satisfy the residence requirement;

2. did not exercise the discretion under s 76(2) of the Duties Act; and

3. issued a notice of assessment (Assessment) for $16,170.55, comprising transfer duty ($9,968.50), penalty tax ($2,984.55) and interest ($3,217.50). The penalty was increased by 20% (from the default rate of 25% to 30%) under s 30(1) of the Taxation Administration Act 1996 (NSW) (“TA Act”).

11. On 15 July 2024 the Applicant objected to the Assessment.

12. On 16 September 2024, the Respondent disallowed the Applicant’s objection in full. 

13. The Applicant filed an application to the Tribunal on 19 November 2024. This was not within the required 60 day period under s 99(1) of the TA Act. The application confirmed that it was filed late, with the Applicant stating:

“I have had some family emergencies with close family health problems that have taken focus and cased this matter to be neglected, I remembered today after talking to my accountant that I need to lodge this appeal as she assure me I am entitled to the first home buyers stamp duty exemption.”

14. There was no submission by the Respondent objecting to any extension of time. I have made an order granting an extension below.

What are the facts?

Acquisition of the land and the terms of the contract

15. The Applicant signed the contract to purchase the property on 25 June 2019 (R2, 1). Settlement occurred on 6 August 2019.

16. The purchase price was $500,000, the title to the land was registered in the name of the Applicant on settlement, and the property was transferred with vacant possession. It comprised 16.0711 hectares (approx 40 acres) on one lot (Lot 4, DP 700864) with a single road frontage.

17. The property was in the Bellingen local government area (LGA) (R1, 1).

18. The property was zoned RU4.

Clause 5 - No Council approvals

19. Clause 50 was included in the contract as a special condition. It read (my emphasis):

“The Purchaser’s [sic] acknowledges and agrees that:-

(a)   The purchase price has been negotiated on the basis that the improvements on the property have not been approved by Bellingen Shire Council.

(b)    The purchaser cannot request the vendor to obtain a Building Certificate and the vendor will not give authority to the purchaser to obtain a Building Certificate.

(c)   They have inspected the subject property and the improvements erected thereon and the inclusions therein and satisfied himself as to the state and condition thereof prior to the execution of this Contract;

(d)    They have entered into this Contract in reliance upon their own inspection as aforesaid and not upon any representations or warranties made by or on behalf of the Vendor;

(e)   They accept the subject property and improvements and inclusions in their present state and condition and subject to any latent or patent defects therein; and

They shall not be entitled to make any requisition, objection or rescind or terminate or claim for compensation in relation to any defect in or want of repair of the state and condition of the subject property and the improvements erected.”

Planning certificate

20. The Contract included a Planning Certificate issued by Bellingen Shire Council under s 10.7(2) and 10.7(5) of the Environmental Planning & Assessment Act 1979 (NSW) (“EPA Act”). It listed the “Relevant planning instruments and DCPs” and referred to various State Environmental Planning Policies (“SEPPs”) then in force and to (inter alia):

1. the Bellingen Local Environmental Plan 2010 (the “2010 Bellingen LEP”); and

2. the Bellingen Shire Development Control Plan 2017 (“2017 Bellingen DCP”).

21. The Planning Certificate also stated (R1, 17):

“2. ZONING AND LAND USE UNDER RELEVANT LEPs

BELLINGEN LOCAL ENVIRONMENTAL PLAN 2010

ZONE RU4 – PRIMARY PRODUCTION SMALL LOTS

….

2. Permitted without consent

Environmental protection works; Extensive agriculture; Home-based child care; Home occupations; Horticulture; Viticulture

3. Permitted with consent

Agricultural produce industries; …. Dual occupancies (attached); Dwelling houses; Farm buildings; Home industries; …. Secondary dwellings; Any development not specified in item 2 or 4.”

…

Additional land acquired

22. The plans of the land as acquired showed that the position of the Caravan encroached on to the adjoining land. The Existing House was built very close to the boundary as well. The Applicant said that because the Existing House was built within 10 metres of the boundary, this precluded the issue of an Occupation Certificate.

23. He said he bought the property for a good price because there were no Occupation Certificates. He said that wasn’t unusual for properties in the Bellingen area.

24. In 2020, the Applicant bought some additional land (1689 m2) in 2020 from the neighbour, and the property’s boundary line was adjusted to accommodate that additional area acquired. As a result, his landholding increased to 16.24 ha (R1, Tab 23).

Electricity was connected to the Shed when he acquired the property

25. The Respondent cross-examined the Applicant at some length regarding email communications between the Applicant and Powershop in 2020 regarding a “new connection” being established to the Shed. It was put to the Applicant by the Respondent that these records evidenced that there was no existing electricity connection to the Shed prior to November 2020 (main excerpts extracted below):

1. 15/5/2020 (Powershop records):

“New Connection NSW requested for 139B [address] Bellingen…”

2. 30/7/2020 (Powershop records):

“[Email from Erik]

There is an existing Large Workshed on the Property, which is separate from the house which we intend to use for business purposes for the business, REL Events Pty Ltd …. We need to connect the power to this business work shed and ensure the electricity bills are separate from the residential dwelling. Under RU2 zoning Home Occupation & Agriculture are exempt developments so we are entitled to run a business from our property. It is vital that our power bills are separate to the existing house for accounting purposes.

Essential Energy advised you (my electricity provider) should be talking to the Business to Business Team (within Essential Energy) to apply for the new NMI. Essential Energy Advised that it is important to make it clear the new NMI will be used for business use for the workshed.

The Address for the shed is 139 [address]”

However, you can allocate 139B [address]

…”

3. 3/8/2020 (Powershop records):

“Council doc provided from customer with new address 2/139 [Property address]”

4. 10/8/2020 (Powershop writes):

“Essential Energy have advised that the NMI allocation has now completed for Lt 1 Unit 2 139 [Property address]

NMI is [number]

Please advise when the site will be ready for the metering to be installed.

We’ll raise the metering service invoice for you and then the contractor will have 6 business days to arrange a suitable time to install the equipment.”

5. 29/9/2020 (Powershop writes):

“We have raised the job for the metering alterations at your property and a contractor would be in contact with your electrician so they can arrange a date to complete the works…”

6. 29/9/2020 (Applicant writes):

“I am writing to advise that the site is now ready to have the new meter box installed for NMI [number].

The new Power Box is located on the large shed where the meter box should be installed.

Please advise when the power can be connected. I am able to meet the electrician onsite when they instal the meter box.”

7. 9/11/2020 (Powershop writes):

“Just a quick email to let you know we received notification back from your distributor that they completed your new connection.

As such, we have applied the fee to your account…”

26. Contrary to the Respondent’s submissions, I find that there was an existing electricity connection to the Shed:

1. I find that, as explained by the Applicant, the reference to a “new connection” in the above exchanges was to the installation of a new metering box and associated connections necessary to allow for separate billing to the Existing House (for payment by the tenants) and the balance of the Property (for payment by the Applicant).

2. This is consistent with his email to the Respondent dated 15 July 2024 which said:

“The property had an existing dwelling and a caravan/annex and a large shed when I purchased it. I moved into the shed which has a working bathroom which is where I lived while building the house. I had some friends move into the existing dwelling which helped pay the mortgage payments while building. The electricity was all connected on one single electricity meter initially so the power was in my friend’s name, the power line extended over my dwelling site so I paid to move the power line underground and set up a second electricity meter. This was connected to the new meter in my name in 2020 (see attached).”

3. The Objection Decision also referred to the advertisement for the property which said the Shed had power.

27. The Applicant said the Shed was “brand new” when he bought the Property. He described it as a “$60,000 shed with lighting and power points connected”. He needed to separately meter the shed so a separate bill could be paid by the tenant. In this regard, electricity was connected in the Applicant’s name since 6 August 2019, with the postal address being “Unit 2” at the Property address. There was no breakdown in evidence between electricity used at each particular building/dwelling, with the bills being stated to be for “Lt 1, 2, [Property address]” (R1, 54).

28. He also said the previous owner had used the Shed to hold church services, for some storage, and for propagation of plants. He explained that a vegetable garden had been planted by her close to the Shed, that a tap was installed, and that there was existing electricity connection when the property was bought; it ran underground from the Existing House, down to the Shed, and then down to an electric piston pump located further down the property at a water source (which needed to be pumped up to the Shed and the garden). I am satisfied that there was an existing water pump, and that it would need a source of electricity to pump the water up to the shed.

29. He also said he needed to move power lines from above ground to underground.

The Applicant lived in the Shed for the required period

30. Mr Bond swore a statutory declaration saying that he rented the Existing House and lived there from September 2019 until March 2022, and that during that time, the Applicant “was also living on the same property in another building”. He confirmed to the Tribunal at the hearing that the Applicant lived in the Shed during this period, and that he could see that the Applicant’s car was parked there.

31. It was put to the Applicant in cross-examination that the Shed was not suitable for use as a residence. The Applicant said he had a working bathroom with a toilet and shower, even though it was located in the “annex area” on the verandah/deck. He had installed a kitchen sink and had a fridge, cooking facilities (admittedly a camp stove), a microwave and all necessary furniture including a folding table, and a bed. The Applicant appeared by AVL and it appeared to be habitable from what I could see on the screen.

32. I do not find that this style of living meant that it was not habitable for use as a residence. It had the basics required to live there. He confirmed it was not intended to be his “final resting place” because he was building the New House.

33. Before the Tribunal, the Applicant went into more detail regarding the items that he moved into the Shed, which included his bed, clothes rack, tables and chairs, and other items. He explained that he owned a large “flat bed” trailer which was 2.4m x 4.0 m which he used for his business. He explained that he used that to transport items from his parents’ home, including a second hand fridge that his mother gave him. He also explained that the Shed had a very good 5G signal because it was located less than 1km away from a Telstra tower. I find, on the balance of probabilities, that he moved items of furniture on the trailer to the Shed, which explains the absence of any removalist invoices.

34. At all relevant times, the Applicant’s parents lived on the family farm in Bellingen (parents’ property).  The Applicant said it was around a 15-20 minute drive away. He denied that he continued to live in Raleigh on his parents’ farm. When put to him, he replied “It’s not true that I was living in Raleigh”.

Other documentation

35. He had arranged some finance for the purchase with a mortgage from Bendigo Bank. It was insured for $100,000: R1 p215.

36. The Applicant said mail wasn’t delivered to the street. He opened a PO Box in Bellingen around 10 years ago, and his mail was sent there. He had this in place when living at his parents’ farm in Raleigh because it was also safer to deliver there rather than to a rural letterbox.

37. His driver’s licence was recorded to a PO Box in Bellingen from 18 December 2015 to date (R1, 36).

38. An incoming passenger card dated 7 November 2019 declared his “intended address in Australia” as his parent’s farm in Raleigh (R1, 160). He said this was an oversight, having only moved to his property 2 months before.

39. He had not updated his address from Raleigh on his electoral roll during the relevant period. He said he had just voted in the recent election, and noticed his address was still at Raleigh.

Business premises?

40. He explained that the reference in the Powershop notes to “business to business” was appropriate, because that is what the end use of the Shed would be once the New House was finished and he could move into it.

41. He said that he only lived in about a quarter of the shed, because it was very large, and he stored some of his equipment in the other part. However, he said that his business had basically stopped because he did sound for music festivals and that came to a halt with all of the COVID lockdowns. That meant he couldn’t work in his business, and that left him with the time to devote to building his New House, which he was doing pretty much on his own.

The parties’ positions

42. The Applicant says he had never owned another property, and had saved up for 10 years (living with his parents) so that he could afford to purchase this one. The Applicant converted the Shed to make it liveable, he lived in the Shed from August 2019 (being within 12 months of the settlement date) while building his new home on the property, and his new home is now almost complete and he has moved into it while finishing it off. In these circumstances, he said, he had complied with all of the requirements, and the very intention of the legislation was to help first home owners to acquire a property for their first home. That is exactly what he has done, and the Tribunal should reverse or waive the assessment.

42. The Applicant also seeks full remission of interest and penalties, if the assessment is confirmed (which he says shouldn’t happen).

43. The Respondent says:

1. Section 75 of the Duties Act provides that an agreement or transfer is not eligible for the purpose of the exemption if it involves the acquisition of business premises. In this case, the contemporaneous documents suggest that the Shed which the Applicant occupied was also used as a workshop for his business.

2. Even if the transfer is eligible, the Applicant has not established that the residence requirement in s 75 has been satisfied because:

1. the residence requirement refers to the occupation by the Applicant of a “home” for the specified period of time, where “home” is relevantly defined as being a building which can be lawfully occupied;

2. the Applicant has not produced an occupation certificate or development consent which confirms that the Shed could be lawfully used as a residence;

3. in the alternative, the Applicant has not satisfied his onus of proof in respect of the satisfaction of the residence requirement; and

3. There is no basis for remission of the interest or penalty tax.

Jurisdiction and onus of proof

45. This is an application under s 96 of the Taxation Administration Act 1996 (NSW) (“TA Act”) for an administrative review of the Assessment. The Assessment was objected to by the Applicant. The Tribunal’s administrative review is therefore conferred by the Administrative Decisions Review Act 1997 (NSW) (“ADR Act”), and the Civil and Administrative Tribunal Act 2013 (NSW) (“NCAT Act”).

46. The Tribunal’s task is to decide what the correct and preferable decision is having regard to the material before it: ADR Act, s 63(1). The Applicant has the onus of proving his case: TA Act, s 100(3). That means he must prove all matters necessary for the Tribunal to answer the statutory question(s) in his favour: Cornish Investments Pty Limited v Chief Commissioner of State Revenue (RD) [2013] NSWADTAP 25 at [36].

47. The standard of proof is the balance of probabilities.

48. Section 100(2) of the TA Act provides that neither the Applicant nor the Respondent are limited in the present application to the grounds of the objection.

The Applicant lived in the Shed as his “principal place of residence”

49. On the balance of probabilities, and having regard to all the above matters, I am satisfied that the Applicant lived in the Shed for a period of at least six months commencing within 12 months of acquiring the property, as his principal place of residence.

50. I find that he moved into the Shed to live, and that it was “habitable” from sometime around late 2020 when he completed the “minor renovations” which included the addition of bathroom facilities in the annexed area.

51. I find that he used and occupied the Shed as his principal place of residence from that time until around April 2022, when he moved in to live at the New House.

52. I find that the statutory declaration and testimony of Mr Bond was not relevantly challenged. I also find it reasonable to conclude that in circumstances where the Shed had adequate facilities to live in it, that it would make little sense for the Applicant to drive to and from his parents’ home on a daily basis when he was in the process of building his New House.

53. I accept that the Applicant made an error on his incoming passenger card, and that there was no mail delivery to the Property such that he continued to use his PO Box in Bellingen.

54. I find that the evidence regarding the drivers licence is inconclusive, but in any event the address for a drivers licence is but one factor.

Not vacant land

55. I find that the Applicant did not acquire “vacant land” under the contract. It is not disputed that there were buildings located on the property when it was acquired.

Not a “home” as defined

56. The Applicant said that his “home” was a converted Shed, which did not require any planning approvals under its zoning. He said it was like a granny flat, and there was no requirement for Council approval to live in the Shed.

57. He confirmed that no planning approvals or occupation certificates had been obtained for any of the buildings on the land, including the Shed and the Existing House.

58. However, the definition of a “home” in s 80A of the Duties Act means a building (affixed to land) that:

(a) may lawfully be used as a place of residence, and

(b) is, in the Chief Commissioner’s opinion, a suitable building for use as a place of residence.

59. I have found above that the Shed was “habitable” in its modified form. However, I am not satisfied that the Shed could “lawfully be used as a place of residence”.

60. The Respondent’s written submissions at [22]-[28] went through a thorough analysis of relevant provisions of the applicable zoning restrictions, Bellingen 2010 LEP, EPA Act, and the Building Code. I agree with the analysis which in summary is as follows:

1. The Shed was a building;

2. A “building” for the purpose of the EPA Act (s 1.4) is defined to include part of a building, and also includes any structure or part of a structure.

3. The Applicant modified the Shed so that he could live in it, and there was therefore a “change of building use” as defined in s 1.4 of the EPA Act. In this regard, a “change of building use” links to a change in use from one class of building recognised in the Building Code of Australia (Code) to another.

4. The Shed (or at least part of it) changed to being used by the Applicant as a residence;

5. That was a change of use from a “Class 10a” building (a “non-habitable building including a private garage, carport, shed or the like”) to another class of building (a “dwelling house” or a “secondary dwelling) under the Code;

6. That change of use was not within the exclusions (which did not require an occupation certificate) in s 6.9(2)(b)(i), (ii) or (iii) of the EPA Act;

7. That change of use therefore required Council approval because s 6.9(1) of the EPA Act, as it stood at the time the Applicant took possession of the property, provided that an occupation certificate was required for the commencement of a change of building use for the whole or any part of an existing building; and

8. The required approval or consent was obtained, as was evident by the fact that no occupation certificate was issued.

61. The word “lawfully” is specifically included in the definition of a “home” in s 80A. It must be given work to do. Accordingly, I am not satisfied that the Applicant could “lawfully” occupy the Shed as his principal place of residence (in whole or in part) in the absence of an occupation certificate.

62. As the Shed did not meet the definition of a “home”, it could not have been a home that was occupied by the Applicant as his principal place of residence for the required period for the purpose of the residence requirement in s 76(1).

63. There is a discretion in s 76(2) granted to the Respondent, and therefore to the Tribunal, to modify the residence requirement by approving a shorter period of occupation (s 76(2)(a)), or to exempt a first home owner from the requirement to comply with the residence requirement (s 76(2)(b)).

64. The Tribunal accepts that the Applicant saved for many years to buy the land, resided in the Shed, built a New House on the Property, now lives in that house, and that it may, at some later date, be approved for occupation by the grant of an occupation certificate. Nonetheless, in the current circumstances, where the central requirement for there to be a “home” is not satisfied, s 76(2)(a) is not relevant, and I am not satisfied that dispensing of the entirety of the residence requirement in s 76(1) would be within the intent of the Scheme.

65. I therefore decline to exercise the discretion in s 76(2)(b).

66. The assessment to duty is therefore confirmed.

Business premises?

67. Having regard to my findings above, it is not strictly necessary to conclude on whether the agreement or transfer was not eligible for the purpose of the duty exemption because it “involves the acquisition of business premises” for the purpose of s 75(3).

68. The Respondent submits that the phrase “business premises” is not defined in the Duties Act, but should be given its ordinary meaning as a place which is used by a business for the purpose of carrying on that business.

69. In the circumstances of this case, there was no existing business being conducted on the property and I would likely have found that the acquisition of the property which included the Shed did not “involve” the acquisition of business premises for the purpose of s 75(3). Rather, I would have found that the acquisition included the acquisition of the Shed, and that building may have subsequently been used to store some business equipment, and later intended to become a venue for the conduct of some part of the Applicant’s business. I am not, however, satisfied that such matters would preclude the operation of the exemption from duty. I also do not agree, as noted above, with the Respondent’s position regarding the exchanges between the Applicant and Powershop.

70. My conclusion also appears consistent with the definition of “business premises” in the Dictionary to the Bellingen 2010 LEP which excludes a “home occupation”, and the note to which states that business premises are a type of “commercial premises”.

Interest and Penalties

Interest

71. There is no dispute regarding the relevant provisions in s 21, 22 and 25 of the TA Act in respect of interest, as set out in the Respondent’s written submissions.

72. In the absence of the exercise of a discretion, the Applicant is liable to pay interest on the amount of unpaid tax with that rate of interest comprising a market and premium component.

73. Section 25 provides for the remission of interest. The current form of s 25 commenced on 1 February 2024 and although guidelines have recently been issued for the purpose of s 25(3), this matter was heard before they came into force.

74. I see no basis for waiving or reducing the market rate of interest, because it is intended to compensate the Respondent for not having the benefit of the tax payment from the time it was due: see Chief Commissioner of State Revenue v Incise Technologies Pty Ltd & Anor (RD) [2004] NSWADTAP 19 (“Incise”) Iat [60], as affirmed by Richmond J in Golden Age and Hannas the Rocks Pty ltd v Chief Commissioner of State Revenue [2024] NSWSC 249 (“Golden Age”).

75. In respect of the premium rate of interest, the default was not caused by actions of the Respondent. Nor am I satisfied that there is sufficient evidence to conclude that the Applicant or the conveyancer took reasonable care, in circumstances where it was clear to the Applicant, and apparent to both he and the conveyancer on the face of the contract, that no Council approvals had been obtained for any buildings on the property. It should, in my view, have raised a query as to what if any impact that would have under the legislation on the claim for an exemption from duty. I do not accept that the Tribunal should find that the Applicant was “recklessly indifferent with respect to his tax obligations” but I agree with the Respondent that the Tribunal should not simply infer or assume that reasonable care was taken, particularly where the incorrect position was clearly adopted.

76. Nor do I find that the Applicant has adduced evidence sufficient to cause me to exercise my general discretion to reduce the premium component of the interest by any amount. In my view, it is also of some relevance that the Applicant did not move into the Existing House to occupy that dwelling as his principal place of residence. Rather, he rented both the Existing House and the Caravan for a period of time.

Penalty

77. If a tax default occurs, the Applicant is also liable to pay penalty tax in addition to interest: TA Act, s 26(1). Under s 27(3) of the TA Act, the Tribunal may determine that no penalty tax is payable in respect of a tax default is satisfied that the Applicant took reasonable care to comply with the taxation law, or the tax default occurred because of circumstances beyond the Applicant’s control 9but not amounting to financial incapacity). For the reasons above, I have found that the Applicant did not take reasonable care.

78. The Tribunal also has residual discretion to remit penalty tax by any amount in such circumstances as it considers appropriate pursuant to s 33.

79. For the reasons given above in relation to the remission of interest, and having regard to the onus of proof being on the Applicant, I do not consider there to be sufficient evidence before me to exercise my discretion to reduce the penalty in whole or in part.

80. The assessment to interest and penalty is therefore also confirmed.

Orders

81. I make the following orders:

1. An extension of time to 19 November 2024 is granted for the filing of the application to the Tribunal under s 99(1) of the Taxation Administration Act 1996 (NSW);

2. The decision under review is affirmed.

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.

Registrar

Decision last updated: 15 July 2025