Nichols v Chief Commissioner of State Revenue

[2005] NSWADT 120

CITATION:	Nichols & anor v Chief Commissioner of State Revenue [2005] NSWADT 120
DIVISION:	General Division
PARTIES:	APPLICANTS John William Nichols Irene Alice Nichols RESPONDENT Chief Commissioner of State Revenue
FILE NUMBER:	043338
HEARING DATES:	14/12/2004
SUBMISSIONS CLOSED:	02/11/2005
DATE OF DECISION:	06/03/2005
BEFORE:	Montgomery S - Judicial Member
APPLICATION:	First Home Owners Grant Act - first home owners grant - refusal of application
MATTER FOR DECISION:	Principal matter
LEGISLATION CITED:	First Home Owners Grant Act 2000 Real Property Act 1900
CASES CITED:	Aird v Chief Commissioner of State Revenue [2004] NSWADT 157
REPRESENTATION:	In person S Benjamin, solicitor
ORDERS:	1.The decision under review is set aside; 2.In its place is made the decision that Mr and Mrs Nichols have satisfied the requirements for the First Home Owners Grant.

1 In 2004 Mr and Mrs Nichols purchased a unit at Henry Kendall Village, a retirement village at Wyoming. They paid the sum of $144,000 for the exclusive right to reside in the unit (“the property”) as their home under a registered 199-year lease.

2 Mr and Mrs Nichols lodged an application for a grant of $7,000 under the First Home Owner Grant Act 2000 (“the Act”) on 3 May 2004. The Chief Commissioner made the decision to deny Mr and Mrs Nichols the $7,000 grant. Mr and Mrs Nichols lodged an objection against that decision asserting that they have a relevant interest in the property for the purposes of the Act.

Applicable Law

3 Section 7 of the Act provides that a first home owner grant is payable if each of the applicants complies with the eligibility criteria and the transaction for which the grant is sought is an eligible transaction. The criteria for determining whether the applicants are eligible for the grant appear in Division 2 of Part 2 of the Act. There are six eligibility criteria. Criterion 2, in section 9 of the Act, provides that at least one of the applicants must be Australian citizen or permanent resident. Mr and Mrs Nichols are New Zealand citizens however there is no suggestion that they do not satisfy Criterion 2. The dispute is in relation to whether the transaction for which the grant is sought is an eligible transaction.

4 Section 13 of the Act provides that an eligible transaction includes a contract for the purchase of a home if it is a contract for the acquisition of a relevant interest in land on which a home is built. Whether or not a person has a relevant interest in land on which a home is built is governed by section 5 of the Act. That section sets out a number of interests that are considered to be “relevant interest” for the purposes of the Act. Section 5(4) of the Act provides that the Chief Commissioner may recognise another interest, a non conforming interest, as a relevant interest in land if there is good reason to do so.

5 In this matter the Chief Commissioner asserts that Mr and Mrs Nichols do not hold a relevant interest in the land on which the home is built. Mr Benjamin contends that what exists is essentially a lease arrangement wherein the lessee pays, under a formula devised by the administrators of the retirement village, a sum, which includes two parts; one towards to the surrendering of the unit by the earlier lessee and the other part being the deferred rent. That being the case, the Chief Commissioner’s view is that Mr and Mrs Nichols do not have a life estate in the land, which could satisfy the relevant interest requirements of the Act, or fall within the scope of a "non-conforming interest" recognised by the Chief Commissioner.

Findings

6 The Chief Commissioner has issued a number of Rulings in relation to the recognition of a "non conforming interest" as a relevant interest under the Act. There are three rulings. They concern (a) building a home on land owned by another person; (b) building a self-contained dwelling annexed to a home; and (c) purchasing a moveable home for use on land owned by another person. I discussed the general approach that the Chief Commissioner has taken to recognition of non conforming interest in some detail in my reasons for decision in the matter of Aird v Chief Commissioner of State Revenue [2004] NSWADT 157.

7 In the circumstances of this matter it is my view that the interest that Mr and Mrs Nichols hold in the land on which the home is built is that of an assignable lease. The arrangement between Mr and Mrs Nichols and the retirement village is such that they could be considered proprietors for the purposes of the Real Property Act 1900. That is, they are “seised or possessed of any freehold or other estate or interest in land at law or in equity in possession in futurity or expectancy”.

8 The evidence given by Mr Richard McCullagh, a solicitor acting for the retirement village, suggests that Mr and Mrs Nichols hold an interest which is registered under the provisions of section 32(3) of the Real Property Act and that interest is protected under section 42 of that Act. There is no documentary evidence in support of that assertion.

9 Nevertheless, it is my view that Mr and Mrs Nichols hold an interest that is comparable to the traditional fee simple arrangement. This arrangement has the sense of permanency that is common to the relevant interests that are set out in section 5 of the Act.

10 The Tribunal stands in the shoes of the Chief Commissioner. The Tribunal is therefore authorised by section 5(4) of the Act to recognise a non conforming interest as a relevant interest in land so as to permit payment of the grant in circumstances where payment would not otherwise be permitted.

11 Mr and Mrs Nichols understood that they were purchasing the exclusive right to reside in the property as their home under a 199 years lease. In my view, the circumstances under which they purchased this property provide the reason to recognise their non conforming interest and allow payment of the grant.

12 It follows in my view that the decision to refuse the grant is not the correct and preferable decision. Accordingly it should be set aside.

Orders

1. The decision under review is set aside.

2. In its place is made the decision that Mr and Mrs Nichols have satisfied the requirements for the First Home Owners Grant.