RABBATH & COMMISSIONER for ACT REVENUE (Administrative Review)

Case •

[2011] ACAT 26

•

30 November 2011

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

RABBATH & COMMISSIONER FOR ACT REVENUE (Administrative Review) [2011] ACAT 25

AT 10/74

Catchwords:             ADMINISTRATIVE REVIEW – transfer of property – whether benefit can constitute consideration for the purpose of the First Home Owner Grant Act 2000 (FHOG Act) – gifts anticipated under a Will – whether a transfer without monetary consideration is an “eligible transaction” – meaning of “consideration” and “purchase” in the FHOG Act – agreement to purchase a unit – past consideration – promises for mutual release being an illusory consideration – under the FHOG Act, consideration should move from the purchaser.

List of Legislation:     Family Provision Act 1969

First Home Owner Grant Act 2000, ss. 4, 5, 7, 8-12A, 13, 18

List of cases:            Baird v Smee [2000] NSWCA 253

Coulls v Bagot Trustee Co Ltd (1967) 119 CLR 460

Scott v Commissioner of Taxation of the Commonwealth
(1966) 40 ALJR 265

Thornton v Jenkyns (1840) 1 Man. & G. 166

Trident General Insurance Co Ltd v McNiece Bros Pty Ltd
(1988) 165 CLR 107

List of Texts/Papers/etc:      

LexisNexis, Concise Australian Legal Dictionary

Tribunal:                  Professor Peta Spender, Presidential Member
  Mr C.G Chenoweth, Member

Date of Orders:  30 November 2011  
Date of Reasons for Decision:         30 November 2011    

AUSTRALIAN CAPITAL TERRITORY            )
CIVIL & ADMINISTRATIVE TRIBUNAL       )          AT 10/74

BETWEEN:

CHRISTIAN RABBATH

Applicant

AND:

COMMISSIONER FOR ACT REVENUE

Respondent

TRIBUNAL:            Professor P Spender, Presidential Member

Mr C.G Chenoweth, Member

DATE:  30 November 2011

ORDER

The decision under review is confirmed.

………………………………..

Professor P Spender

Presidential Member
on behalf of the Tribunal

REASONS FOR DECISION

Background

  1. Professor Jean Rabbath is a distinguished pianist and piano teacher who lived for many years at premises in Monaro Crescent, Red Hill (“the Property”).  Professor Rabbath and his wife had three sons, Christian, Patrick and Pascal.  Mrs Rabbath died in 2008.  On the date of hearing, Professor Rabbath had sold the Property and moved to live with Patrick in Queensland.  Pascal also lives in Queensland.  Christian lives in Canberra in a unit in Braddon (“the Unit”).  For reasons of convenience, the Tribunal shall refer to Professor Rabbath, Patrick and Christian by their first names.  In these reasons, Christian shall also be referred to as “the Applicant”.

.

  1. The Unit was purchased by Patrick in an “off the plan” transaction in 2001.  The settlement of Patrick’s purchase of the Unit was completed in 2003, when the purchase was completed with the assistance of a mortgage provided by Perpetual Pty Ltd.  In 2009 this mortgage was repaid by Patrick, by borrowing against a property that he owns in Queensland.  A discharge of the mortgage over the Unit was given on 16 October 2009.[1]  The Tribunal has been advised that this discharge of mortgage was lodged for registration with the Registrar General’s office at the time of lodging the transfer of the Unit from Patrick to Christian. Christian has lived in the Unit for many years prior to the transfer and continues to live there.

    2. [1] Exhibit A1

  1. Patrick and Christian entered into a contract for the sale and purchase of the Unit on 11 December 2009. The consideration shown was $345,000.00. The contract (“the Contract”) was in the standard ACT Law Society form and was signed by Patrick and Christian. The Contract and a transfer form were lodged with the Respondent for assessment. Duty of $11,975.00 was assessed on the transfer.  The registration of the transfer was completed in March 2011.
  1. It was acknowledged by the Applicant that that the purchase price shown in the Contract has not been paid in cash or bank cheque by Christian to Patrick. The Applicant claims that the purchase price has been discharged or paid by a family transaction as set out in the following paragraphs. It follows from this that neither Patrick nor the Applicant expect or propose that the Applicant will pay any separate consideration for the Unit, other than by the adjustment of the proceeds of sale of Jean’s property referred to later in these reasons.

The Family Transactions

  1. Sometime prior to or during July 2009 Patrick and Jean came to an agreement (“the Oral Agreement”) that Patrick should transfer the ownership of the Unit to the Applicant.  This agreement was referred to in clause 4 (b)(ii) of the will dated the 2 July 2009 (“the Will”), as discussed in the next paragraph. 

    1. As stated above, on 2 July 2009, Jean made the Will.  The Will provided for Jean’s assets to be divided between Christian and Patrick with a gift over to Pascal if either of his brothers dies before Jean. As Jean is still alive, the Will has not taken effect, but the Tribunal accepts that it represented the intentions of Jean at the date that it was made, and also at 10 March 2010 when a copy of the Will was annexed to a deed of that date made between Jean, Christian, Patrick and Pascal (‘the Deed”).
    1. Clause 4(b) of the Will provides that after payments of Jean’s debts and expenses, the following assets should go to Christian:

    (b) to give to my son Christian Charles Robin Rabbath of Unit 407/86 Northbourne Avenue (Phoenix Apartments), Braddon 2612, in the Australian Capital Territory;

    (i)       The Yamaha model WX3 piano at present in the house at 131 Monaro Crescent, Red Hill in the Australian Capital Territory;

    (ii)    The transfer in ownership of the Phoenix Apartment (the value of which will be determined by an independent market assessment) from my son Patrick Edmond Raphael Rabbath as already agreed by my son Patrick Edmond Raphael Rabbath; and

    (iii)   Cash;

    which combined, are the equivalent of one third of the value of my following assets:

    (i)        The house at 131 Monaro Crescent, Red Hill 2603, in the Australian Capital Territory (the value of which will be determined by an independent market assessment or market sale less marketing expenses, whichever occurs earlier), and

    (ii)      The home contents at 131 Monaro Crescent, Red Hill 2603, in the Australian Capital Territory, owned by me and valued at $180,000.00 (which has been derived from their insured value).

As stated above, clause 4(b)(ii) of the Will makes it clear that prior to the   

signing of the Will there was an agreement by Patrick to transfer the Unit to    

Christian, at a value to be determined by independent assessment.  There is no  

reference to payment.

  1. The intention drawn from this clause is that Christian is to receive benefits, equal to one third of the value of the Property and contents partly by a transfer of the Unit from Patrick, by the gift of a piano from Jean, and with the balance up to the one third of the value of the Property to be paid in cash.  Jean did not own the Unit and there is no suggestion that Patrick held the Unit on trust for Jean. This transfer required the consent of, and could only be undertaken by, Patrick.
  1. On 10 March 2010, the Deed was executed. It is described as the “Rabbath Family Settlement Deed”. The recitals to the deed are as follows:

A.The parties acknowledge the execution and continuing operation of the Will of Jean, made on the 2nd of July, 2009, appearing at Annex A to this document;

B.Pascal and Patrick have provided financial support to Jean and the late Therese Rabbath over the years, and especially in preparing 131 Monaro Crescent, Red Hill 2603, in the Australian Capital Territory, for sale.

C.The parties agree that Christian  will receive unencumbered ownership of Unit 407/86-88 Northbourne Avenue (Phoenix Apartments), Braddon 2612, in the Australian Capital Territory (‘the Unit’) under the Settlement Deed from Patrick.

D.The parties acknowledge that in his will, Jean has compensated Patrick for the value of the Unit and that this compensation forms the consideration for the transfer of the Unit from Patrick to Christian.

  1. The only operative clause in the Deed is clause 2. It provides:

2.      Operative Part

2.1 The Parties to this Deed agree:

(a)   the transfer of ownership of Jean’s possessions identified under  
      Jean’s Will to Christian, Pascal and Patrick has already  

occurred; and

(d)   Christian, Pascal and Patrick will have no other claims against  

each other under Jean’s Will.

The deed has an “entire agreement” clause in the usual form, which excludes any other condition or warranty. It annexes the Will.

The First Home Owners Grant Scheme

  1. On 10 March 2010, Christian lodged an application with the Respondent under the First Home Owners Grant Act 2000 (“the FHOG Act”).  The application was refused. Christian’s solicitors lodged a request for reasons which was provided by the Respondent’s letter[2]and attached statement dated 3 August 2010.[3]

[2] T5

[3] T13-T18

  1. A first home owner’s grant is payable where the applicant has not previously owned property in the A.C.T.  It was common ground that Christian had not owned such property prior to the acquisition of the Unit.
  1. Section 7 of the FHOG Act sets out the entitlement to a grant. It provides:

(1) A first home owner grant is payable on an application under this Act

if—

(a) the applicant or, if there are 2 or more of them, each of the

applicants complies with the eligibility criteria; and

(b) the transaction for which the grant is sought—

(i) is an eligible transaction; and

(ii) has been completed; and

(c) if the first home owner grant cap applies to the eligible

transaction for which the grant is sought—the total value of  

the transaction is not more than the amount of the first home

owner grant cap.

...

(2) Despite subsection (1) (a), an applicant need not comply with the

eligibility criteria to the extent the applicant is exempted from

compliance under this Act.

(3) Only 1 first home owner grant is payable for the same eligible

transaction.

  1. Sections 8-12A of the FHOG Act set out the eligibility criteria that an applicant must comply with. It was not disputed by the Respondent that Christian complied with all of the criteria in these provisions.
  1. The definition of “eligible transaction” is set out in section 13(1) of the FHOG Act. It provides that an eligible transaction is “a contract for the purchase of a home in the ACT made on or after 1 July 2000”.
  1. Section 13(4)(a) of the FHOG Act specifies when an eligible transaction is completed. In the case of an existing home, it is when:

(i)the purchaser becomes entitled to possession of the home under the contract ; and

(ii)if the purchase is to obtain a registered title to the land on which the home is situated – the necessary steps to obtain registration of the purchaser’s title have been taken; …

  1. The FHOG Act, in section (13)(6)(a), defines the consideration for an eligible transaction as: “for a contract for the purchase of a home—the consideration for the purchase”.
  1. The amount of grant is set by section 18(1) of the FHOG Act. It provides:

(1) The amount of a first home owner grant is the lesser of the
      following:
     (a) the consideration for the eligible transaction;
     (b) $7,000.

  1. The Unit is a “home” as defined in section 4 of the FHOG Act. Christian derived a “relevant interest” in land pursuant to section 5 of the FHOG Act, by acquiring a leasehold interest in the Unit, at least after the Contract dated
    11 December 2009 was signed.
  1. In accordance with the provisions of the FHOG Act, no grant is payable where there is no consideration for a transfer of property, for example when the property is transferred pursuant to a gift, or if the property is inherited under a valid will.  The issue in this case is whether “consideration”,  as used in the FHOG Act, can arise through the provisions of the Deed and the Will, rather than through a payment to the transferor from the transferee.  Related to this issue is whether the transaction constitutes an "eligible transaction" for the purposes of the FHOG Act. 
  1. The Applicant filed written submissions dated 10 November 2010,
    8 December 2010 and 7 March 2011.  Patrick gave oral evidence at the hearing. His evidence was as follows:

(i)He purchased the Unit “off the plan” and settled its purchase in 2003, with a mortgage from Perpetual Limited.

(ii)Christian has lived in the Unit for a number of years and has expressed a wish to own it.

(iii)The intention of Jean when the Property was sold was that the three brothers should benefit equally, and that Christian should take an unencumbered title to the Unit as part of his “share” in the proceeds of the disposition of the Property.

(iv)The mortgage on the Unit was discharged in October 2009 by Patrick using other assets at his disposal. The discharge was not lodged for registration until the transfer from Patrick to Christian was lodged.

(v)Christian had not paid Patrick any money for the transfer of the Unit.

(vi)While Pascal did not benefit directly under the Will, there was an informal agreement between Patrick and Pascal that the amount left to Patrick would be used to assist Pascal. This had happened. Christian had received a small sum in cash.

The Applicant’s Arguments

  1. Mr Phillis, on behalf of the Applicant, argued that there is "consideration" for the transfer of the Unit deriving from the terms of the Will and the Deed.  He further argued that "consideration" in the FHOG Act should be interpreted more widely than "the amount paid for the purchase of a home", which is the definition of "consideration" set out in the Explanatory Memorandum to the FHOG Act and relied upon by the Respondent in the decision under review.[4] The Applicant submitted that the definition of "consideration" should be the ordinary concept of that term as understood in the general law.

[4] See, statement of reasons T17-T18

  1. It was also submitted that while the FHOG Act required that there be a "contract for the purchase of a home in the ACT," there was a "purchase" as required by the FHOG Act and that the provisions of the Deed and the Will constituted a contract.  The standard form of agreement entered into on
    11 December 2009 was not to be regarded as constituting the "contract" for the purposes of the FHOG Act, but it provided a way of calculating adjustments and resolving disputes which may have arisen out of the actual contract documents, the Deed and the Will.  The consideration for the transfer of the Unit was to be found in the Deed, and the value of the purchase was to be established having regard to the one third value of the Property.  No money was to be paid by Christian to Patrick.
  1. The Deed also provided further consideration in the mutual promises by the three sons set out in clause 2(b) of the Deed not to take action against each other in relation to their father's estate.  The Applicant therefore contends that valuable consideration has flowed with respect to the agreement under which Christian achieved ownership of the Unit.  Details of the elements of this alleged consideration were provided in the Applicant’s solicitor’s letter dated 25 May 2010 which sought reconsideration of the Respondent’s decision at first instance to refuse the grant.[5] 

    2. [5] T43-T45

  1. The Applicant also argued that the transaction was not a sham as the steps involved were all intended to have legal effect.

The Respondent’s Submissions

  1. Ms McBride of Counsel, on behalf of the Respondent, submitted that:

(i)The only relevant contract for the purchase of the Unit was the Oral Agreement made between Jean and Patrick before or during July 2009 when Patrick agreed to transfer the Unit to Christian and Jean agreed to gift property under the Will to, inter alia, Patrick.

(ii)the Contract was in reality no contract at all because Patrick had already agreed to transfer the unit for no consideration in the expectation of a benefit flowing to him under the Will.

(iii)similarly the Deed had no effect other than to evidence the Oral Agreement.

(iv)

while the Contract was not necessary to transfer an interest in the Unit (it could have been transferred by an instrument of transfer alone), it was a necessary document if the transfer was to qualify as an "eligible transaction" for the purposes of FHOG Act.



(v)the Contract was merely a disguise for the purposes of obtaining the FHOG Grant, and in that sense was a sham or a scheme.

(vi)the Will could not pass an interest in or ownership of the Unit, as it was not an asset owned by Jean.

(vii)Christian was not privy to the contract made between Jean and Patrick and gave no consideration for the purposes for the FHOG Act. The consideration flowed between Jean and Patrick.  The promises that were enforceable were the promise made by Jean to gift the assets under the Will and the promise by Patrick to transfer the Unit to Christian.  Christian was not a party to this contract and gave no consideration.  Although Christian was a beneficiary or nominee of Jean under the Oral Agreement and could enforce the contract in equity, this does not constitute consideration moving from Christian for the purposes of the FHOG Act.

Discussion of the Documents

  1. It is clear from the dates of the documents that the series of transactions involving the distribution of the proceeds of sale of the Property among the brothers had been arranged prior to July 2009.  The Will in clause 4 (b)(ii) speaks of the transfer of the Unit to Christian "as already agreed" by Patrick.
  1. The Contract was entered into some five months later on 11 December 2009.  While it states a purchase price of the Unit which was based on a valuation and accepted for stamp duty purposes, the evidence before the Tribunal is clear that there was never any intention that the sum should be separately paid by Christian to Patrick.  At this point the expectations were still verbal and a matter of personal family arrangement.
  1. The Deed came into existence three months later on 10 March 2010.  It was executed by Jean and his three sons and is, on the face of it, enforceable.  The question is, to what effect?  Recital A could be construed as an acknowledgement that Jean had not changed and would not change his Will prior to his death. Recital C confirms the transfer of the Unit under the Contract.  Recital D states that the benefit given to Patrick under the Will "forms the consideration for the transfer of the Unit from Patrick to Christian."
  1. Clause 2.1(a) of the Deed does not add to the picture. It simply states that the assets of Jean identified under the Will have already been given to the sons. The clause cannot affect the Unit itself, as this was the property of Patrick, and was already subject to both the Oral Agreement and the Contract.
  1. This clause does not impose any additional obligations on any one: it simply records past history. It does not of itself transfer any interest in the Unit: that had already been done in equity by the Contract. At best, the Deed brought into existence an implied undertaking by Christian not to take proceedings under the Family Provision Act 1969 or similar legislation for a greater share of Jean's estate after his death.
  1. Clause 2(1)(b) amounts to a mutual release by the brothers of each other, and perhaps, by implication, a covenant by each of them not to sue for an additional interest in Jean's estate beyond what is provided for in the Will.
  1. The essence of the Applicant's case is that this collection of documents, when viewed as a whole, demonstrates that there was "consideration" for the purposes of the FHOG Act, and if so, that the amount of that consideration in monetary terms was sufficient to require the Respondent to pay the FHOG Act grant.
  1. The Tribunal finds that the only agreement which might, prima facie, constitute a contract for the purchase of a home in the ACT (i.e. the Unit) for the purposes of section 13 of the FHOG Act was the Oral Agreement made between Jean and Patrick in or about July 2009. The terms of this agreement were that the Unit would be transferred to the Applicant in the expectation that Patrick would inherit some property under the Will. Both the Applicant and the Respondent agree that such an agreement may constitute a contract for the purposes of FHOG Act because there is no requirement under the FHOG Act that a relevant contract conform with the Civil Law (Property) Act 2006 ("the Property Act)[6] and/or the Applicant could rely upon equitable remedies such as part performance or estoppel to resist an argument by Patrick that the contract had to conform with the Property Act.[7] 

    [6] Applicant's reply dated 7 March 2011 at [13]

    [7] Respondent's submissions dated 14 February 2011 at [26]

  1. The subsequent “promises” made by Jean, Patrick, Christian and Pascal in the Will and in the Deed had no effect.  Christian was not a party to the Oral Agreement though he was a beneficiary of the promises made under that agreement.

Is the Applicant entitled to a First Home Owner Grant?

36. A first home owner grant would be payable on application by an applicant under section 7 of the FHOG Act, if, pursuant to section 7 of that Act, the transaction for which the grant is sought:

(i) is an eligible transaction and

(ii) has been completed. 

As stated above, the alleged eligible transaction in the present case is a contract for the purchase of a home in the ACT made on or after 1 July 2000 pursuant to section 13(1)(a)) FHOG.

  1. Both the submissions of the applicant and the respondent discussed the meaning of the word “purchase”. The Applicant relied upon the definition of the Shorter Oxford Dictionary as follows:

3.The action or process of procuring, obtaining, or acquiring for oneself in any way; acquisition, gain, attainment

4.Law.  The acquirement of property by one's personal action, as dist. from inheritance.

  1. The Respondent relied upon the Butterworths Australian Legal Dictionary which defines “purchase”, as amongst other things:

2 to acquire real estate by any means other than descent.  Purchase includes the acquisition of the title to the land by lawful means such as by transfer or conveyance.  The term includes sale, mortgage, pledge, and lien for valuable consideration (emphasis added by the Respondent)

  1. Under section 13(6)(a) FHOG Act, the consideration for an eligible transaction in the form of a contract for the purchase of a home is the consideration for the purchase.
  1. Although in its statement of reasons at first instance and upon reconsideration, the Respondent relied upon the Explanatory Memorandum to the First Home Owner Grant Bill which states that “consideration” is defined for the purposes of this provision as the amount paid for purchase of the home, the Tribunal considers that the meaning of the word "consideration" in this provision is not so confined and the meaning of the word must be understood by reference to the general law.  Under the general law, the concept is broader and contemplates non-monetary promises. 
  1. In his submissions on this point, the Applicant relied upon specific examples of consideration, that is, the mutual releases under clause 2.1(d) of the Deed, and a more general argument, that the Applicant had provided consideration when the transactions "as a whole” were examined.

Specific Consideration by Mutual Releases

  1. Dealing with the alleged specific consideration first, the Applicant argued that the mutual releases under clause 2.1(d) of the Deed are evidence that he has given consideration in the form of promise not to bring a future claim under the Family Provision Act 1969.  There is some doubt about whether such a promise would be enforceable.[8]  In any case, the Respondent argues that Jean’s estate would need to be a party to such release in order for the release to have any effect and, in the absence of involvement by the estate, would constitute illusory consideration.[9]  Moreover, because this "promise" was made in the Deed dated 10 March 2010, it constitutes past consideration as the Contract was made on 11 December 2009.

    2. [8] A Preece, Wills and Estate Administration, The Laws of Australia at [36.2.40], [36.2.1680]

    [9] Respondent's submissions at [33]

  1. In this respect, it is worth noting that, according to the evidence of Patrick Rabbath, the Property was sold in December 2009 and funds that might otherwise be held in the estate were transferred by Patrick Rabbath in February 2010 in accordance with an Enduring Power Of Attorney held by him.
  1. The Applicant argued in his application for reconsideration that a release can constitute good consideration even if the claim at law is doubtful. 
  1. Given the ambit of the relevant contract as found by the Tribunal and discussed above, the Tribunal further finds that the “promises” in the form of the mutual releases given by Christian in the Deed are illusory.  Christian was the recipient of gift under the Oral Agreement and any subsequent “promises” made by him are irrelevant because he was not party to the Oral Agreement made in July 2009.  Although it could be argued that these “promises” constitute past consideration for the Contract (as the Respondent did in these proceedings), the Contract was not operative to transfer the property in the Unit and therefore the issue is peripheral.
  1. The Tribunal concludes that the mutual releases in the Deed dated 10 March 2010 cannot constitute "consideration" for the purpose of section 13(6) of the FHOG Act.

Consideration Based on the Transactions as a Whole

  1. To counter the arguments put by the Respondent about past consideration and the ambit of the relevant contract, the Applicant argued the Tribunal is not bound to apply a strictly chronological test in determining whether (and when) consideration has been given by Christian.  In particular, if the consideration and the promise are substantially one transaction, the exact order in which these events occurred is not decisive.[10]  In support of this proposition, Mr Phillis submitted that lawyers acting on behalf of the Applicant had attempted to lodge a bare transfer for stamping but this was rejected, necessitating the lodgement of the other documents.  Patrick Rabbath confirmed this.

    2. [10] Thornton v Jenkyns (1840) 1 Man. & G. 166     

  2. Attempts to aggregate the documents so as to constitute a contract for the purchase of the Unit for the purposes of the FHOG Act leads to illogicalities.  For example, a will, of itself, cannot constitute a contract for purchase.[11]  Further, the clear expression in the Deed that the acts have already been performed leads to the conclusion that the Deed is nugatory.

    3. [11] Baird v Smee [2000] NSWCA 253

  3. However, given that the Tribunal has found that the relevant contract for the purposes of the FGHOG Act was the Oral Agreement, can the Applicant rely upon the Oral Agreement to support his application for a First Home Owner Grant?

  4. As stated above, the Applicant was not a party to the Oral Agreement and prima facie would not be entitled to enforce it.  However, the Applicant relies upon Coulls v Bagot Trustee Co Ltd,[12] to differentiate between questions of privity of contract and consideration, which is the salient inquiry for the purposes of the FHOG Act.  Coulls v Bagot held that where A promises B for a consideration supplied by B to pay C then B may obtain specific performance of A’s promise.  It is irrelevant that C provided no part of the consideration.  Applying this analysis, Patrick has promised Jean to transfer the Unit to the Applicant therefore, on this analysis, Jean may obtain specific performance of Patrick’s promise to do so.

    5. [12](1967) 119 CLR 460 at [32]

  1. However, this analysis does not lead to the conclusion that Christian has provided consideration for the purchase pursuant to section 13(6) FHOG Act. It only establishes that the person who gave the consideration i.e. Jean can enforce the agreement. In certain circumstances, Christian may also be entitled to enforce the agreement at law [13] or in equity[14] but it cannot be said that Christian has given consideration.

    2. [13] Trident General Insurance Co Ltd v McNiece Bros Pty Ltd (1988) 165 CLR 107

    [14] Note, for example, Giumelli v Giumelli (1999) 196 CLR 101

  1. Nevertheless, could Jean’s consideration under the Oral Agreement be relied upon by Christian to fulfil the requirements of the FHOG Act?
  1. The argument would be that the consideration for an “eligible transaction” in section 13(6) of the FHOG Act does not require that the consideration for the purchase be given by the Applicant and that consideration provided by Jean is sufficient for the transaction to fulfil the criteria of "eligible transaction" under section 7(1)(b)(i) of the Act. Perhaps for argument’s sake, it may be said that Jean has provided consideration for the purchase of the Unit in the form of a promise that he will not amend the Will. However, there is no express clause to that effect.
  1. But even if it was possible for a third party to provide consideration under section 13(6) of the FHOG Act, the criterion under section 7(1)(b)(ii) still needs to be satisfied before the grant is payable. In relation to a contract for the purchase of a home, pursuant to section 13(4) of the FHOG Act, the eligible transaction is completed when the purchaser becomes entitled to the possession of the home under the contract and the purchaser must take the necessary steps to obtain registration of the purchaser's title to the land on which the home is situated.
  1. A purchaser is defined as a person who acquires an interest in property for valuable consideration.[15] Therefore, even if Jean provided the necessary consideration under section 13(6) of the FHOG Act, the operation of section 13(4) precludes this interpretation because it anticipates that the consideration moves from the purchaser.

    2. [15] LexisNexis, Concise Australian Legal Dictionary, page 480

  1. According to this analysis, the transactions, when viewed as whole, would not fulfil the requirements of the FHOG Act.

Disguise or Sham

  1. The Tribunal makes no finding as to whether or not the transactions constitute a disguise or sham as described by Windeyer J in Scott v Commissioner of Taxation of the Commonwealth.[16]  The Tribunal considers that there was insufficient evidence provided in the present proceedings to support such a finding.

    2. [16] (1966) 40 ALJR 265 at 279

Conclusion

  1. The Tribunal concludes that the Applicant has not satisfied the requirements for the payment of a First Home Owner Grant. The Tribunal considers that the documents, upon their proper construction, evidence gifts that are or were anticipated under the Will, or, in the case of the Deed, manifest arrangements that have already been put into effect. Although it could be argued that consideration moved from Jean for the purchase of the Unit, this consideration did not satisfy the requirement that the eligible transaction had been completed, pursuant to section 7(1)(b) (ii) of the FHOG Act.
  1. Accordingly, the decision under review is confirmed

……………………………..

Professor P Spender

Presidential Member
on behalf of the Tribunal

PUBLICATION DETAILS

TO BE PUBLISHED

To be completed by Tribunal Staff

PART A  FILE NO:      

APPLICANT:                
RESPONDENT:            

COUNSEL APPEARING:       APPLICANT:          

RESPONDENT:      

SOLICITORS:  APPLICANT:          

RESPONDENT:      

OTHER:  APPLICANT:          

RESPONDENT:      

TRIBUNAL MEMBER/S:        

DATE/S OF HEARING:  PLACE: CANBERRA

DATE/S OF DECISION:  PLACE: CANBERRA

PART B

RECOMMENDATION:

FULL REPORT ( )        CASE NOTE ( )        UNREPORTED DECISION ( )

COMMENTS:


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Cases Citing This Decision

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Cases Cited

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Lourandos and Yiannokopoulos & Act Planning and Land Authority and Ors (Administrative Review) [2011] ACAT 25
Baird v Smee [2000] NSWCA 253
Wilson v Darling Island Stevedoring & Lighterage Co Ltd [1956] HCA 8