SARROS and COMMISSIONER OF STATE REVENUE
[2022] WASAT 102
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
ACT: TAXATION ADMINISTRATION ACT 2003 (WA)
CITATION: SARROS and COMMISSIONER OF STATE REVENUE [2022] WASAT 102
MEMBER: DR S WILLEY, SENIOR MEMBER
HEARD: 2 MARCH 2022, 3 MARCH 2022 AND 23 MARCH 2022
DELIVERED : 18 NOVEMBER 2022
FILE NO/S: VR 28 of 2021
BETWEEN: CHRIS SARROS
ZIFKO SARROS
Applicants
AND
COMMISSIONER OF STATE REVENUE
Respondent
Catchwords:
Taxation - Land Tax - Exemption - Private residential property - Whether dwelling used as primary or principal place of residence - Relevant factors that inform assessment of whether a dwelling is used as a primary or principal place of residence
Legislation:
Interpretation Act 1984 (WA), s 5, s 10(c)
Land Tax Act 2005 (Vic), s 53(2)
Land Tax Assessment Act 2002 (WA), s 4, cl 1, cl 2, s 5, s 7(1), s 12, s 12(2), s 17, s 20, s 21, s 21(1), s 21(1)(a)
State Administrative Tribunal Act 2004 (WA), s 3(1), s 17, s 27(1), s 27(2), s 29(1)
Taxation Administration Act 2003 (WA), s 37(2), s 40(1), s 94, s 95, s 95(2), s 107(1)(a)
Result:
Application dismissed
Category: B
Representation:
Counsel:
| Applicants | : | Dr M Robson |
| Respondent | : | Ms R Panetta |
Solicitors:
| Applicants | : | Robson Legal |
| Respondent | : | State Solicitor's Office |
Case(s) referred to in decision(s):
Abela v Commissioner of State Revenue [2017] VCAT 1024
Acitino v Commissioner of State Taxation [2020] SACAT 32
Applegate v Federal Commissioner of Taxation [1978] 1 NSWLR 126; (1978) 8 ATR 372
Black v Chief Commissioner of State Revenue [2011] NSWADT 66
Browne v Commissioner of State Revenue (2001) 27 SR (WA) 249
Cameron v Chief Commission of State Revenue [2009] NSWADT 64
Carey v Chief Commissioner of State Revenue [2010] NSWADT 78
Chief Commissioner of State Revenue v Ferrington [2004] NSWADTAP 41; (2004) 57 ATR 170
Chuang v Chief Commissioner of State Revenue [2009] NSWADT 160
Commissioner of State Revenue (Vic) v Landrow Properties Pty Ltd [2010] VSCA 197; (2010) 79 ATR 800
Commissioner of State Revenue v Abbotts Exploration Pty Ltd [2014] WASCA 211; (2014) 48 WAR 300
Commissioner of State Revenue v Burdinat [2012] WASC 359; (2012) 90 ATR 689
Commissioner of State Revenue v De Campo [2007] WASCA 136; (2007) 33 WAR 542
Commissioner of State Revenue v Mesiti [2003] NSWADTAP 57; (2003) 54 ATR 400
Commissioner of State Revenue v Serana [2008] WASCA 82; (2008) 36 WAR 251
Dean v Commissioner of Stamp Duties [1996] 2 Qd 557
Diethelm Manufacturing Pty Ltd v FCT (1993) 44 FCR 450
Federal Commissioner of Taxation v Consolidated Media Holdings Ltd [2012] HCA 55; (2012) 250 CLR 503
Fincher v Commissioner for ACT Revenue (1996) 32 ATR 1213
Haddad v Commissioner of State Revenue [2013] VCAT 208
Harding v Federal Commissioner of Taxation [2019] FCAFC; (2019) 269 FCR 311
JM Bestall v Commissioner of State Revenue [2005] WASAT 32; (2005) 38 SR (WA) 311
Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298
Kerruish v Commissioner of State Revenue [2018] VCAT 1724
Kyriakou v Commissioner of State Revenue (Taxation) [2011] VCAT 640
Leda Manorstead Pty Ltd v Chief Commissioner of State Revenue [2010] NSWSC 867; (2010) 79 NSWLR 724
Levene v Inland Revenue Commissions [1928] AC 217
Lou v Chief Commissioner of State Revenue [2019] NSWCATOD 9
Match Group v Metropolitan South West Joint Development Assessment Panel [2014] WASCA 50; (2014) 200 LGERA 227
McIntosh Brothers Pty Ltd v Chief Commissioner of State Revenue [2019] NSWCATAD 124
Mohammadi v Bethune [2018] WASCA 98
Nakhoul v Chief Commissioner of State Revenue [2009] NSWADT 103
Ord Irrigation Cooperative Ltd v Department of Water [2018] WASCA 83; (2018) 232 LGERA 33
Paspaley v Chief Commissioner of State Revenue [2014] NSWCATAD 217; (2014) 100 ATR 60
Placer Dome Inc v Commissioner of State Revenue [2017] WASCA 165; (2017) 106 ATR 511
Police (SA) v Kyriacou [2009] SASC 66; (2009) 193 A Crim R 490
Re Ivankovic and Commissioner of State Revenue [2013] WASAT 21; (2013) 92 ATR 107
Re Rowell; Public Trustee v Bailey (1982) 31 SASR 361
Re Ziino and Commissioner of State Revenue [2004] VCAT 1707; (2004) 56 ATR 630
Semmens and Commissioner of State Revenue [2006] WASAT 219
StokeOn-Trent Borough Council v Cheshire County Council [1915] 3 KB 699
Tobin v Chief Commissioner of State Revenue [2009] NSWADT 188; (2009) 77 ATR 346
Unkovich v Commissioner of State Taxation (1994) 11 SR (WA)
Whitby v The State of Western Australia [2019] WASCA 11
Zinno v Commissioner of State Revenue [2004] VCAT 1707; (2004) 56 ATR 630
REASONS FOR DECISION OF THE TRIBUNAL:
Introduction
In his 1716 work, The Cobbler of Preston, the British actor Christopher Bullock coined the phrase 'Tis impossible to be sure of anything but Death and Taxes'. The prophetic observation that there are few certainties in life continues to hold true, even in 2022. However, as Bullock acutely observed, one of life's few certainties is the obligation to pay tax.
These reasons deal with a dispute about tax, namely whether land tax is payable on a property pursuant to the Land Tax Assessment Act 2002 (WA) (LTA Act). In summary, land tax is an annual tax on land that a person owns that is not his or her principal place of residence.
In this matter, brothers Chris and Zifko Sarros (together the Applicants) seek a review of their land tax assessment under the LTA Act. The principal contest is whether land they own at No 10 Harkins Street, Westminster (the Subject Lot) was their primary residence for the purposes of s 21 of the LTA Act for land tax assessment years 2016/2017, 2017/2018 and 2018/2019. Therefore, by reason of s 7(1) of the LTA Act, the key dates that are the focus of the reasons are 30 June in 2016, 2017 and 2018 (together the Relevant Dates).
In these reasons, I will refer to Chris and Zifko by their first names. No disrespect is intended.
The Commissioner of State Revenue (Commissioner or Respondent) considers that the Subject Lot was not the primary place of residence for either Chris or Zifko on any of the Relevant Dates. On 4 March 2021, Revenue WA disallowed an objection from the Applicants against the assessment of land tax issued on 7 August 2019. The dismissal of the objection is the basis for the review in the Tribunal pursuant to the right provided by s 40(1) of the Taxation Administration Act 2003 (WA) (TA Act).
For the reasons that follow, I do not accept the Applicants' case that the Subject Lot was either Chris' or Zifko's primary place of residence on any of the Relevant Dates. Accordingly, the application for review (Review) should be dismissed.
Background
The following background is largely not contested.
The Applicants
The Applicants are two elderly brothers.
As at the Relevant Dates, Chris was married. (Chris asserts that he was living apart from his wife. However, the status of that marriage is contested by the Respondent).
As at the Relevant Dates, Zifko was not married.
As at the Relevant Dates, Zifko's son resided on the lot that is adjacent to the Subject Lot at No 8 Harkins Street, Westminster (the Adjoining Lot). For some time, including throughout the Relevant Dates, Zifko's son was suffering from a number of health conditions which required him to assist his son at the Adjoining Lot. (The amount of time Zifko spends at the Adjoining Lot is not agreed).
Land owned by the Applicants
On 9 April 1981, the Applicants purchased, as joint registered proprietors, the Subject Lot (being Lot 201 on Deposited Plan 302898, Certificate of Title Volume 1590 Folio 155).
On 4 August 1966, Zifko purchased, as the sole registered proprietor, the Adjoining Lot (being Lot 80 on Plan 7927, Certificate of Title Volume 1285 Folio 355).
On 12 December 2006, Chris together with his wife, became joint registered proprietors, of No 2 Esla Place, Carine (being Lot 1 on Diagram 90976, Certificate of Title Volume 2072 Folio 149) (2 Esla Place).
On 30 January 1969, the Applicants became the joint registered proprietors of No 327 Charles Street, North Perth (being Lot 250 on Deposited Plan 29191, Certificate of Title 180 Folio 153A) (Charles Street Lot).
Zifko explains that he and Chris operate a property leasing business together (the Business).[1] The Business owns 20 residential properties and six commercial properties (which together comprise 14 individual units).
[1] Exhibit 6, at para 8.
Zifko explains that the following properties are owned by, or are associated with, him:
Owned solely by Zifko
· The Adjoining Lot
· No 3 Flandrin Way, Carine
· No 3 Cricklewood Way, Carine
Owned by Zifko jointly with others
· The Subject Lot.
· The Charles Street Lot
· No 122 Arkana Road, Westminster with Chris
· No 17 Kirke Street, Balcatta with Chris and Australasian Land Corporation Pty Ltd
· No 93 Flora Terrace, North Beach with Chris and Leray Pty Ltd
Owned by Region Developments Pty Ltd
· No 8 Duffy Road, Carine, owned jointly with Australasian Land Corporation Pty Ltd
· No 5 Flandrin Street, Carine
· No 7 Flandrin Street, Carine, owned jointly with Australasian Land Corporation Pty Ltd
· No 9 Flandrin Way, Carine
· No 8 Doriot Way, Carine
· No 24 Mathis Way, Carine
Owned by Australasian Land Corporation Pty Ltd
· No 8 Duffy Road, Carine, owned jointly with Region Developments Pty Ltd (as described above)
· No 7 Flandrin Street, Carine, owned jointly with Region Developments Pty Ltd (as described above)
· No 17 Kirke Street, Balcatta, owned jointly with Chris and Zifko (as described above)
· No 3 Waldorf Street, Carine, owned jointly with Sarros Holdings Pty Ltd
· No 20 Sharon Drive, Carine, owned jointly with Leray Pty Ltd
· No 29 Sharon Drive, Carine
· No 39 Sharon Drive, Carine, owned jointly with Chris
· No 3 Pomeroy Place, Carine
Owned by Sarros Holdings Pty Ltd
· No 3 Waldorf Street, Carine, owned jointly with Australasian Land Corporation Pty Ltd (as described above)
· No 1 Cricklewood Way, Carine, owned jointly with Region Developments Pty Ltd
· No 22 Uppill, Place, Wangara
Owned by Leray Pty Ltd
· No 20 Sharon Drive, Carine, owned jointly with Australasian Land Corporation Pty Ltd (as described above)
· No 93 Flora Terrace, North Beach, owned jointly with Chris and Zifko (as described above)
· No 5 Flandrin Street, Carine, owned jointly with Region Developments Pty Ltd (as described above)
· No 5 Cobbler Place, Mirrabooka owned jointly with Phillip Mark Sarros
· No 43 Mathis Way, Carine
· No 81 Lockyer Avenue, Northam
· No 83 Lockyer Avenue, Northam
· No 85 Lockyer Avenue, Northam
Owned by Capeen Pty Ltd
· No 98 Erindale Road, Balcatta
Chris does not own any land solely in his name.[2] Chris, like Zifko, is associated with Region Developments Pty Ltd, Australasian Land Corporation Pty Ltd, Sarros Holdings Pty Ltd, Leray Pty Ltd and Canteen Pty Ltd.
[2] Exhibit 5, para 3.
In addition to the table above, Chris also owns No 6 Doriot Way, Carine, owned jointly with Region Developments Pty Ltd.
Relevant land tax history
For the period 30 June 2007 to 30 June 2020, the Respondent determined that the Adjoining Lot was 100% exempt from land tax by reason of s 21 of the LTA Act on the basis that Zifko owned and used it as his primary residence. No objection was lodged by Zifko in relation to these determinations.
For the period 30 June 2008 onwards, the Respondent determined that 2 Esla Place was 100% exempt from land tax pursuant to s 21 of the LTA Act on the basis that Chris and his wife used it as their primary residence. No objection was raised by Chris to these determinations.
For the period 30 June 2006 to 30 June 2020, the Respondent determined that land tax was payable on the Subject Lot on the basis that it was not used as the Applicants' primary residence for the purposes of s 21 of the LTA Act.
On 28 November 2013, in the Magistrates Court of Western Australia, Zifko was found guilty of contravening s 107(1)(a) of the TA Act, namely by providing information to an investigator of the then Office of State Revenue (now known as Revenue WA) knowing it to be false. The offence related to Zifko's claim in July 2011 that the Subject Lot was used by him and Chris as their primary residence.
The applications for land tax exemptions on the Subject Lot
On 27 June 2016, the Respondent received separate partially completed Land Tax Application for Residential Exemption forms from the Applicants in relation to the Subject Lot.
On Zifko's application form for the 2016/2017 assessment year, Zifko asserted that he had resided on the Subject Lot since 2012. On Chris' application for 2016/2017, he asserted he had resided on the Subject Lot since May 2016. Chris subsequently confirmed that he was seeking an ongoing exemption from 2016/2017.
On 15 September 2016, Revenue WA wrote to the Applicants asking that the application forms be completed in full. On 4 November 2016, the Respondent received a completed Land Tax Application for Residential Exemption form for Chris in relation to the Subject Lot. Chris asserted, again, that he had been residing at the Subject Lot since May 2016.
On or about 31 January 2018, the Commissioner of State Revenue (Commissioner) received a Land Tax Application for Residential Exemption form for Zifko in relation to the Subject Lot. The form's declaration portion was separately completed on 14 February 2018. Zifko again asserted he had resided on the Subject Lot since 2012.
The Commissioner investigates the applications for land tax exemptions
On 22 November 2017, Revenue WA (Mr Sean Saunders) commenced an investigation to assess the applications made by Zifko and Chris for land tax exemptions on the Subject Lot.
Because of the commencement of the investigation, original assessments were not issued for the 2016/2017, 2017/2018 and 2018/2019 assessment years for the Subject Lot while the investigation was ongoing.
Outcome of the Commissioner's investigation
On 31 May 2019, the Commissioner reached a preliminary determination on the investigation by concluding that the Subject Lot did not qualify for an exemption for any of the Relevant Dates. The Applicants were advised of this preliminary determination.
On 26 July 2019, after receipt of submissions from the Applicants and further investigations, the Commissioner determined, on a final basis, that the Subject Lot did not qualify for a land tax exemption on any of the Relevant Dates for either Chris or Zifko. The Applicants were informed of this decision.
Following this, on 7 August 2019, a land tax notice of assessment (Notice) was issued for the Subject Lot for the Relevant Dates. In substance, based on the Notice, it appears (based on my calculations) that the Applicants were liable to pay a total of $141,870 for the Subject Lot for the Relevant Dates ($44,770 for 2016/17 + $48,550 for 2017/18 and $48,550 for 2018/19).[3]
[3] Exhibit 2, pages 1113 to 1117.
In any event, the Notice of land tax required payment of $233,733.75 for the Relevant Dates across three properties (the Subject Lot, the Charles Street Lot and No 22 Arkana Road, Westminster). The Subject Lot had an assessed value of $4,000,000 as at 30 June 2018.
On 4 October 2019, the Applicants lodged an objection of the relevant land tax assessments for the Relevant Dates. They submitted that the land tax assessment for the Relevant Dates for the Subject Lot be reduced to nil.
On 4 March 2021, Revenue WA disallowed the Applicants' objection.[4]
[4] Exhibit 2, pages 1099 to 1112.
On 22 April 2021, the Applicants lodged the Review.
The evidence that supported the Commissioner's investigation
In conducting its investigation, the Respondent collated a range of information that was provided to the Applicants and was considered in making the reviewable decision.
As I will come to explain, the accuracy of some of this evidence is disputed by the Applicants.
Inspection of the dwelling on the Subject Lot
On 19 January 2018, investigation officers of the Respondent (Mr Saunders and Ms Kanako Sato) inspected the dwelling on the Subject Lot. As I will come to explain, while the Applicants dispute the investigation officers' notes in this regard, the notes were made and typed up contemporaneously (at 2.05 pm on 19 January 2018).[5]
[5] Exhibit 2, pages 89-98.
The investigating officers were not permitted by Chris to take photographs but noted the following inside the dwelling:
…
(a)in the bedroom allocated to Zifko was:
(I)a chest of drawers;
(II)a wardrobe with many shirts, suit pants, three pairs of shoes;
(III)a bed,
(b)in the bathroom was:
(I)two towels;
(II)toothbrushes;
(III)toothpaste;
(IV)a shower curtain;
(V)soap,
(c)living room was:
(I)a 42-inch television;
(II)two leather couches;
(III)a coffee table;
(IV)a split air conditioner,
(d)in the kitchen was
(I)a laptop computer;
(II)a table;
(III)a refrigerator. The refrigerator contained no fresh food (no vegetables, bread or fruit) but only contained condiments such as sauces and butter;
(IV)a freezer which was empty;
(V)rusty cutlery;
(VI)an electric stove;
(VII)an oven;
(e)in the laundry was:
(I)a top load washing machine;
(II)washing powder;
(III)an outside toilet;
(IV)an electric hot water supply.
Mobile telephone data
During the Relevant Dates, Zifko used an Optus mobile service. The relevant data indicated that Zifko stayed overnight in Westminster 99% of the time.
Water consumption
For the period 12 February 2016 to 10 August 2018, 143,000 litres of water were used at the Subject Lot which equates to an average of 157 litres per day. However, within that there were two 'outlier' periods[6] which, if excluded, evinced an average water usage of only 28 litres per day.[7]
[6] Exhibit 2, page 171 (readings on 12 October 2016 and 12 October 2017).
[7] Exhibit 2, page 171.
As a comparison, for the same period as outlined above, 186,000 litres were consumed at the Adjoining Lot which equates to an average of 204 litres per day.[8]
[8] Exhibit 2, page 175.
Between the period 9 April 2013 to 12 February 2016, 1,000 litres were used at the Subject Lot, which equates to an average of 0.96 litres per day.[9]
[9] Exhibit 2, page 171.
As a comparison, for the same period as outlined above, the Adjoining Lot consumed 219,000 litres of water, an average of 174.2 litres per day.[10]
[10] Exhibit 2, page 175.
Chris says, however, that in mid-September 2019 he contacted the Water Corporation concerned the water meter at the Subject Lot was faulty. The water meter was replaced on 17 September 2019.[11]
Electricity usage
[11] Exhibit 5, paras 83 to 85.
For the period 13 June 2016 to 8 August 2018, the average daily consumption of electricity for the Subject Lot was 3.5 kilowatt hours (kWh).[12]
[12] Exhibit 2, pages 192-193.
As a comparison, for the period 3 May 2016 to 5 September 1018, the average daily consumption of electricity for 2 Esla Place was 29.35 kWh.[13]
[13] Exhibit 2, page 200.
For the period 31 May 2013 to 1 April 2016, the average daily consumption of electricity for the Subject Lot was 0 kWh.[14]
[14] Exhibit 2, pages 193-194.
As a comparison, between 2 May 2013 to 3 May 2016, the average daily consumption of electricity for 2 Esla Place was 47.23 kWh.[15]
Gas usage
[15] Exhibit 2, page 200.
During the Relevant Dates, gas was not connected to the Subject Lot.[16]
Building insurance
[16] Exhibit 2, page 67.
During the Relevant Dates, the building insurance for the Subject Lot was for $200,000 - $206,000.[17]
Contents insurance
[17] Exhibit 2, pages 87, 225-227.
During the period 30 June 2017 to 17 January 2018, there was no contents insurance for the Subject Lot.[18]
[18] Exhibit 2, pages 221, 225-226.
On 18 January 2018, the Applicants took out contents insurance of $10,000 for the Subject Lot.[19]
[19] Exhibit 2, pages 40-42, 87, 221, 227-230, 251.
By way of comparison, for 2 Esla Place:
(a)between 21 October 2014 to 21 October 2015, contents insurance was held for $152,000;
(b)between 21 October 2015 to 21 October 2016, contents insurance was held for $152,000;
(c)between 21 October 2016 to 21 October 2017, contents insurance was held for $153,000; and
(d)between 21 October 2017 to 21 October 2018, contents insurance was held for $155,000.[20]
Motor vehicle insurance
[20] Exhibit 2, pages 36-39.
Between 30 November 2014 to 23 January 2018, the vehicle insurance policy for vehicle with registration number 1DRL###[21], registered in Chris' name, identified that the 'address where the car [was] kept overnight' was 2 Esla Place.[22]
[21] Vehicle with registration 1DRL### is also identified in AAMI policy as 1DRL###. Chris provided information on 14 February 2018 advising that registration 1DRL### is correct.
[22] Exhibit 2, pages 257-260, 285, 293, 297, 303 and 305.
From 23 January 2018, the vehicle insurance policy identified that vehicle 1DRL### would be kept overnight at the Subject Lot.[23]
[23] Exhibit 2, pages 33-35, 132, 261-263 and 267-283.
Since 17 October 2014, the vehicle insurance policy for 1DSP###, registered in the name of Australasian Land Corporation Pty Ltd, nominated the 'address where car [was] kept overnight' as 2 Esla Place.[24]
Visits and drive-by inspections
[24] Exhibit 2, pages 315-318, 321, 327, 329,337, 341, 345 and 351.
On 18 January 2018, at approximately 9:45 am, investigators observed Chris drive and park a white sedan believed to be a Mercedes Benz at the Subject Lot.[25]
[25] Exhibit 2, page 64.
On 5 April 2018, at approximately 8:50 am, investigators attended the Adjoining Lot and observed that vehicle 1DRL### was parked in front of the Subject Lot.[26]
[26] Exhibit 2, page 111.
On 5 April 2018, at approximately 9:25 am, investigators observed vehicle 1DSP### parked in front of the Subject Lot.[27]
Use of the Subject Lot
[27] Exhibit 2, page 112.
The Subject Lot is listed as Chris' address on:
(a)Department of Transport Licence and Third-Party Insurance Policy correspondence issued on 14 December 2015 and 28 April 2016;[28]
[28] Exhibit 2, pages 15 and 16.
(b)Department of Transport Driver's Licence Renewal correspondence dated October 2015;[29]
[29] Exhibit 2, pages 25 and 26.
(c)Department of Transport Licence and Motor Injury Insurance Policy issues on 15 December 2014, 14 December 2015, 14 December 2016 and 14 December 2017;[30]
[30] Exhibit 2, pages 48-51 and 128-31.
(d)Telstra invoices for a landline, which is connected at the Relevant Lot, issued on 5 November 2016, 4 February 2017, 4 August 2017, 4 November 2017 and 4 February 2018;[31]
[31] Exhibit 2, pages 52 and 133-151.
(e)Police Incident Report of 8 December 2015;
(f)National Police Certificate dated 30 November 2015;[32]
(g)his tax return for 2015 and 2016 years;[33]
(h)electoral communications since 14 April 2016;[34]
(i)Triennial Certificate for Real Estate Agent Business dated 24 December 2015;[35]
(j)Australian Border Force incoming passenger cards from 17 July 2018;[36]
(k)Water Corporation correspondence for the Subject Lot throughout the Relevant Dates;[37]
(l)Synergy correspondence since 24 July 2009;[38]
(m)WA Police databases during the Relevant Dates;[39]
(n)AHG Roadside Assist correspondence;[40] and
(o)Crown Perth correspondence dated 16 September 2015.[41]
[32] Exhibit 2, page 9.
[33] Exhibit 2, pages 23-24 and 220.
[34] Exhibit 2, pages 12, 21-22.
[35] Exhibit 2, page 14.
[36] Exhibit 2, pages 805 and 806.
[37] Exhibit 2, pages 17 and 18.
[38] Exhibit 2, pages 19 and 20.
[39] Exhibit 2, page 215.
[40] Exhibit 2, page 13.
[41] Exhibit 2, pages 27 and 28.
Chris lists 2 Esla Place as his address for:
(a)his 2015 tax return;[42]
(b)Australian Border Force incoming passenger cards from 10 January 2014 until 8 January 2018;[43] and
(c)Synergy correspondence since 2000.
[42] Exhibit 2, page 220. But see pages 23 and 24.
[43] Exhibit 2, pages 807 to 815.
Chris listed the Adjoining Lot as his home address for Telstra on 5 February 2016.
Entertaining friends
Two friends of Chris asserted that Chris used the Subject Lot for entertainment purposes between 2015 and 2019.[44]
Eating
[44] Exhibit 2, pages 1130 and 1131.
Chris advised the investigating officers that he eats out six times a week and does not cook at the Subject Lot.[45]
Showering
[45] Exhibit 2, pages 90 and 91.
Chris advised the investigating officers that he showers at the Charles Street Lot.[46]
Time spent at 2 Esla Place
[46] Exhibit 2, pages 67 and 99.
Chris advised the investigating officers that for a number of years he has lived apart from his wife but that he still spends time at 2 Esla Place to see his wife and children.[47]
Further information
[47] Exhibit 2, pages 90, 1085 and 1122.
Two Harkins Street residents informed investigating officers in April 2018, that Chris had resided at the Subject Lot since 2015.[48]
Issue for determination
[48] Exhibit 2, pages 123 and 124.
The parties consider, and I agree, that the principal (or ultimate) issue is whether the Subject Lot qualified for exemption under s 21 of the LTA Act as at each or any of the Relevant Dates based on the Applicants' use. I am to assess Chris' and Zifko's applications separately over the Relevant Dates. Therefore, in effect, I am making six decisions in this Review.
The parties agree that at all relevant times:
(a)the Subject Lot was private residential property for the purposes of s 21 of the LTA Act;
(b)the Applicants owned the Subject Lot; and
(c)the Subject Lot was not held on trust.
However, the Applicants assert, and the Respondent disputes, that at all relevant times, the Subject Lot was being used by them as their primary residence for the purposes of s 21 of the LTA Act.
It is that contest which is the focus of these reasons.
Statutory scheme
As stated, the Respondent's decision to disallow the Applicants' objection is a 'reviewable decision' for the purposes of the State Administrative Tribunal Act 2004 (WA) (SAT Act).[49] That is to say, the matter arises in the Tribunal's review jurisdiction.[50]
[49] TA Act, s 40(1) read with s 17, SAT Act.
[50] SAT Act, s 17.
Pursuant to s 27(1) of the SAT Act, the review hearing is a hearing de novo. In dealing with the review, I am cloaked with the same functions and discretions as the Respondent in making the reviewable decision.[51] My task is to make the correct and preferable decision on the Review.[52]
[51] SAT Act, s 29(1).
[52] SAT Act, 27(2).
I am also mindful, as the Tribunal observed in JM Bestall and Commissioner of State Revenue,[53] that although the hearing is de novo and I may consider evidence that was not before the Respondent, such evidence cannot, as it were, be seen to have retrospective effect.
[53] JMBestall v Commissioner of State Revenue [2005] WASAT 32; (2005) 38 SR (WA) 311 [19].
That is to say, the question is whether the use of the Subject Lot by the Applicants was such so as to meet the description of being their 'primary residence' for the purposes of s 21 of the LTA Act as at any of the Relevant Dates. In effect, this is a historical inquiry into events and circumstances as at the Relevant Dates.
Section 5 of the LTA Act provides that land tax is payable every 'financial year' for all land within the State, except land that is exempt under s 17 of the LTA Act. A financial year is the period of 12 months ending on 30 June.[54]
[54] Interpretation Act 1984 (WA) (Interpretation Act), s 5.
Pursuant to s 7(1) of the LTA Act, land tax is payable for an 'assessment year' by the owner of the land as at midnight on 30 June in the previous year. Section 17 provides that land is exempt from land tax if the Commissioner grants an exemption under s 20 or is exempt under another provision within Pt 3 (which, relevantly, includes s 21).
Section 20 has no application to the proceeding. However, s 21 of the LTA Act includes an exemption with respect to 'private residential property' that is owned by individuals provided it is used as his or her 'primary residence'.[55]
[55] LTA Act, s 21(1)(a).
Section 4 of the LTA Act establishes a Glossary of defined terms. That Glossary includes the following definitions:
(a)'private residential property' means 'a lot of land on which there is a private residence …';
(b)'lot' means 'a defined portion of land- '(a) which is the whole of the land the subject of…(ii) a certificate of title registered under the Transfer of Land Act 1893 (WA)';
(c)'private residence' as it appears in the definition of 'private residential property' means 'a building or part of a building that was occupied, or fit to be occupied and intended by the owner to be occupied, as a place of residence of one or more individuals …'; and
(d)'primary residence' is defined to mean, 'the individual's sole or principal place of residence'.[56]
[56] LTA Act s 4, cl 1, cl 2.
The term 'individual' in the context of s 21(1) of the LTA Act means a natural person[57] and can be read so as to include more than one individual.[58]
[57] Interpretation Act, s 5.
[58] Interpretation Act, s 10(c).
Section 12 of the LTA Act relates to land that is conjointly owned. Section 12(2) relevantly provides:
When determining the extent (if any) to which the land is exempt or subject to a concession, the following matters are to be taken into account —
(a)each joint owner's use of the land by virtue of which the land is exempt or subject to a concession (whether or not the use is common to any of the other joint owners);
(b)each joint owner's interest in the land by virtue of which the land is exempt or subject to a concession (whether or not the interest is common to any of the other joint owners).
While, in the ordinary course, in the Tribunal's review jurisdiction, no party carries an onus of proof,[59] that is not the case in the context of this proceeding. That is so perforce of s 37(2) of the TA Act, which provides that the onus of establishing that an assessment or decision to which an objection relates is invalid or incorrect, rests with the taxpayer.
[59] Ord Irrigation Cooperative Ltd v Department of Water [2018] WASCA 83; (2018) 232 LGERA 33, [115] (Buss P, Murphy JA, Mitchell JA).
It is therefore for the Applicants to satisfy me that the Respondent's decision (that the Applicants' use of the Subject Lot on any of the Relevant Dates did not qualify for an exemption under s 21 of the LTA Act) was incorrect.[60]
[60] Placer Dome Inc v Commissioner of State Revenue [2017] WASCA 165; (2017) 106 ATR 511 (Placer Dome), [208] (Martin CJ, Buss JA and Murphy JA agreeing); Commissioner of State Revenue v Serana [2008] WASCA 82; (2008) 36 WAR 251, [106]-[107] (Buss JA).
Furthermore, a taxpayer claiming the benefit of an exemption from the imposition of a tax has the burden of proving the facts necessary to fall within that exemption.[61] The Applicants therefore carry the onus of establishing the criteria set out in s 21 of the LTA Act to the civil standard, being on the balance of probabilities.[62]
[61] Re Ivankovic and Commissioner of State Revenue [2013] WASAT 21; (2013) 92 ATR 107, [15] (Chaney P); Diethelm Manufacturing Pty Ltd v FCT (1993) 44 FCR 450, 457 (French J).
[62] Lou v Chief Commissioner of State Revenue [2019] NSWCATOD 9, [87]; Paspaley v Chief Commissioner of State Revenue [2014] NSWCATAD 217; (2014) 100 ATR 60 [17] (Paspaley).
I turn, now, to s 21(1) of the LTA Act which lies at the heart of this proceeding. The principal contest in this case concerns each Applicants' use of the Subject Lot (a private residential property) and the question of whether that usage is such that it may be said the Subject Lot was their 'primary residence' as at any or all of the Relevant Dates.
It follows that the question focuses attention of the statutory language. That is to say, what does it mean to '[use] a [private residential property] as a primary residence'?
Principles of statutory construction
Buss JA, in Commissioner of State Revenue v Abbotts Exploration Pty Ltd, set out the following in relation to the construction of statutory instruments:
The modern approach to statutory construction is purposive. The statutory text is the surest guide to Parliament's intention. A decision as to the meaning of the text must begin by considering the context, in its widest sense. This will include the general purpose and policy of the provision[.][63]
[63] Commissioner of State Revenue v Abbotts Exploration Pty Ltd [2014] WASCA 211; (2014) 48 WAR 300, [160] (Buss JA, Newnes JA agreeing) (Abbotts Exploration).
The starting point is, therefore, to consider s 21 of the LTA Act in its statutory context. That will include: (a) consideration of the LTA Act as a whole;[64] (b) consideration of the state of the law and its relevant history; and (c) the mischief which was the statute was intended to redress.
[64] See generally Mohammadi v Bethune [2018] WASCA 98 [31]-[36], in particular [35] (Martin CJ, Mazza JA, Beech JA).
Consideration of statutory context will include having regard to extrinsic materials and legislative history.[65] Such matters can be considered as a matter of common law, without the need to resort to s 19 of the Interpretation Act.[66] However, if the meaning of the text is clear, there is no mandate to rely on legislative history or extrinsic materials.[67]
[65] Federal Commissioner of Taxation v Consolidated Media Holdings Ltd [2012] HCA 55; (2012) 250 CLR 503, [39] (French CJ, Hayne, Crennan, Bell and Gageler JJ) (Consolidated Media).
[66] Abbotts Exploration [91].
[67] Consolidated Media [39].
Finally, I also observe, as has been stated by the Victorian Court of Appeal, that taxation statutes are 'technical' and 'complex' and need to be approached accordingly.[68]
The proper construction of s 21 of the LTA Act
[68] Commissioner of State Revenue (Vic) v Landrow Properties Pty Ltd [2010] VSCA 197; (2010) 79 ATR 800, 815 (Neave JA, Harper JA, Hansen JA).
For ease of reference, s 21(1) of the TLA Act is in the following terms:
Private residential property (except property held in trust) is exempt for an assessment year if, at midnight on 30 June in the financial year before the assessment year, it is owned —
(a)by an individual who uses it as his or her primary residence[.]
The word 'uses' in s 21(1)(a) is not a defined term and therefore it takes its plain and ordinary meaning which is to '[utilise] or [employ] for or with some aim or purpose'.[69] It follows that 'use' has regard to the purpose to which the land is put.[70]
[69] Commissioner of State Revenue v Burdinat [2012] WASC 359; (2012) 90 ATR 689, [7] (McKechnie J) (Burdinat) citing Commissioner of State Revenue v De Campo [2007] WASCA 136; (2007) 33 WAR 542, [41] (Buss JA, Wheeler JA and Miller JA agreeing) (De Campo).
[70] Commissioner of State Revenue v Mesiti [2003] NSWADTAP 57; (2003) 54 ATR 400, [43] (Mesiti).
In the context of s 21(1)(a) of the LTA Act, for the exemption to apply, the 'use' must relate to private residential property which is that person's primary residence.[71] In this proceeding, it is not in contest that the Subject Lot was, at the Relevant Dates, used for residential purposes.
[71] Burdinat [7].
As stated, the term 'primary residence' is defined in cl 1 of the Glossary to mean, 'the individual's sole or principal place of residence'.
The words 'sole' and 'principal' are not defined so therefore take on their ordinary and common meaning. 'Sole' means: 'being the only one of its kind'[72] or 'one and no more, only one, a single'.[73] 'Principal' means 'first or highest in rank, importance'[74] or 'of a number of things or persons, or one of their number: belonging to the first rank; amongst the most important; prominent, leading, main'.[75]
[72] Macquarie Dictionary online.
[73] Oxford English Dictionary online.
[74] Macquarie Dictionary online.
[75] Oxford English Dictionary online.
In the relevant context, it is plain that 'principal' means an individual's 'primary' or 'main' residence.[76]
[76] Black v Chief Commissioner of State Revenue [2011] NSWADT 66, [83] citing Carey v Chief Commissioner of State Revenue [2010] NSWADT 78, [30].
The use of the term 'principal' in 'principal place of residence' does not mean that a person cannot use or occupy more than one residence. However, the exemption under s 21(1)(a) is only available for the person's principal place of residence.[77]
Judicial consideration of s 21(1)(a) of the LTA Act
[77] Carcary v Chief Commissioner of State Revenue [2011] NSWADT 244; (2011) 85 ATR 518, [30]; Chuang v Chief Commissioner of State Revenue [2009] NSWADT 160, [19] (Chuang).
Section 21 of the LTA Act (and analogous provisions from other jurisdictions) have been subject to judicial consideration. These cases provide some guidance as to how to evaluate the question of whether an individual uses a private residential property as one's primary residence.
The starting point is that the ordinary meaning of 'place of residence' for an individual is where they eat, drink and sleep.[78] That is to say, an individual's primary residence is where they eat and sleep and their settled or usual abode.[79]
[78] Nakhoul v Chief Commissioner of State Revenue [2009] NSWADT 103(Nakhoul), [26], citing Ridley J in StokeOn-Trent Borough Council v Cheshire County Council [1915] 3 KB 699 (Stoke-On-Trent Borough Council), 706.
[79] Semmens and Commissioner of State Revenue [2006] WASAT 219 (Semmens), [38]; Browne v Commissioner of State Revenue (2001) 27 SR (WA) 249 (Browne), 252. See also Re Ziino and Commissioner of State Revenue [2004] VCAT 1707; (2004) 56 ATR 630 (Re Ziino), [6].
The Respondent submits that in instances where an individual has multiple places of residence, the cases suggest that regard must be had to each of their places of residence.[80] The authority relied upon by the Respondent for this proposition (Kerruish v Commissioner of State Revenue) is from Victoria.
[80] Kerruish v Commissioner of State Revenue [2018] VCAT 1724, (Kerruish) [17].
In this regard, I note that s 53(2) of the Land Tax Act 2005 (Vic) expressly requires that, in determining such questions, account must be taken of every place of residence of the person, whether in Victoria or elsewhere. The LTA Act contains no equivalent provision.
Nevertheless, I do agree that in circumstances where an individual has more than one residence, it is no doubt appropriate, indeed necessary, to have regard to each place of residence to determine which residence attracts the exemption as the primary place of residence.
In Chief Commissioner of State Revenue v Mesiti, the Administrative Decisions Appeal Panel of New South Wales set out the following analysis, with which I agree:
[What is required] is that a judgement or comparison be made, to identify which, among the one or more places of residence of a particular person, is the principal place of residence of that person.[81]
[81] Mesiti [38].
The test as to which residence may be regarded as an individual's 'principal' place of residence:
… is a question of fact and degree to be determined on an objective view of the evidence before the Tribunal, having regard to the extent and quality of the residences' use and occupation.[82]
[82] Paspaley [61]; see also Cameron v Chief Commission of State Revenue [2009] NSWADT 64, [46] (Cameron).
The authorities focus attention on objective evidence that an individual actually resides at the residence, 'rather than observing a ritual of occupancy while in fact living elsewhere'.[83] The term 'ordinary residence' connotes some degree of continuity apart from accidental or temporary absences. The question is one of fact and degree.[84]
[83] Abela v Commissioner of State Revenue [2017] VCAT 1024, [32] (Abela).
[84] Unkovich v Commissioner of State Taxation (1994) 11 SR (WA), 107, 108 citing Levene v Inland Revenue Commissions [1928] AC 217, 225.
The Applicants' submissions include references to authorities that support the proposition that an individual may maintain a residence as their principal place of residence even though they may live in a number of different places, occupying each for only a relatively short period of time.[85] The mere absence from an individual's established place of abode, does not change their contemplation of it, or its status.[86]
[85] Harding v Federal Commissioner of Taxation [2019] FCAFC; (2019) 269 FCR 311, [41] (Davies and Stewart JJ) citing Applegate v Federal Commissioner of Taxation [1978] 1 NSWLR 126; (1978) 8 ATR 372, [134] (Sheppard J). These cases focus on the question of whether the taxpayer had a 'permanent place of abode' outside of Australia for income tax assessment purposes.
[86] Re Rowell; Public Trustee v Bailey (1982) 31 SASR 361, 370 (Wells J). This case focused on whether an individual being treated at a mental facility for three years could still be said to be her 'principal place of abode'.
I am also mindful of the comments of Deputy President Macnamara in Kyriakou v Commissioner of State Revenue (Kyriakou) where he explained that, in evaluating aspects of an individual's habits or rituals, it is important to keep some matters in perspective:
I am somewhat reluctant however to place too much reliance on issues such as where a person ate his meals or washed his clothes as indicia of where his principal place of residence might be. To give too much attention to those words or to give literal effect to some of the statements in the Tribunal decisions relied upon by the Commissioner might lead to the conclusion that an individual who worked long hours, ate his meals in restaurants and cafes, and had his clothes laundered at work or at a commercial laundry would be a person without any principal place of residence.[87]
[87] Kyriakou v Commissioner of State Revenue (Taxation) [2011] VCAT 640, [38]
The leading authority on the question of ascertaining an individual's principal place of residence is, perhaps, Chief Commissioner of State Revenue v Ferrington (Ferrington).[88]
[88] Chief Commissioner of State Revenue v Ferrington [2004] NSWADTAP 41; (2004) 57 ATR 170.
In Ferrington, the New South Wales Administrative Decisions Tribunal set out a number of principles to inform the question of identifying an individual's 'principal place of residence'. In Commissioner of State Revenue v De Campo, the Western Australian Court of Appeal, in substance, gave tacit endorsement to the 'Ferrington principles'.[89]
[89] De Campo [39].
The Ferrington principles are as follows:[90]
(1)The words 'principal place of residence' should be given their ordinary meaning in the context in which they appear.
(2)Consideration of whether a person has been residing or occupying premises as his or her principal place of residence is to be assessed objectively, in the light of the circumstances relating to the actual occupation of the dwelling.[91]
(3)The intention of the person concerned, gauged objectively, is relevant but not determinative of the issue.[92]
(4)To occupy a home as his or her principal place of residence a person's occupation must have a degree of permanence to it: a connection to a place of residence of a transient, temporary, contingent or passing nature is not sufficient, nor is occupation for some other purpose.[93]
[90] Ferrington [42].
[91] The fact that the question is to be assessed objectively in the light of the circumstances of the actual occupation of the residence directs attention to the objective facts of that occupation. Those objective facts will include consumption of utilities as against comparable data: Haddad v Commissioner of State Revenue [2013] VCAT 208, [7] (Haddad).
[92] An individual's intentions are not decisive nor dominant. The question of whether the residence was the individual's principal place of residence is an objective fact that I must determine: Mesiti [59]; Cameron [46].
[93] The principle focuses on whether the individual's use of the residence had a temporary or permanent character: Haddad [7]. Much will depend on the circumstances in each case. In Abela, at [47], it was observed that '[j]ust as a short period of occupation may nevertheless have the requisite degree of permanence, a long period of very nominal or perfunctory occupation might never have had any degree of permanence to it, as would be the case for example where a person had purchased a property intending to 'land bank' it'. In order to be of a permanent character, more than 'an occasional, limited or temporary presence' is required. There needs to be a requisite degree of permanence together with an intention to make it one's home and that intention is reflected in the reality of its use as such: Abela [26]; see also Acitino v Commissioner of State Taxation [2020] SACAT 32, [41] (Acitino).
Other relevant factors may include:
(a)the time spent at the residence as against other residences, including the number of nights slept at each place[94] and that character and pattern of such use;[95]
[94] Dean v Commissioner of Stamp Duties [1996] 2 Qd 557, 567; Paspaley [164].
[95] Black v Chief Commissioner of State Revenue [2011] NSWADT 66, [84] (Black); Haddad [17].
(b)evidence of an individual's use of the address of the property for mail purposes, driving licence, the electoral roll, immigration records, income tax returns and utility bills;[96]
[96] Chuang [22]; Nakhoul [27]; Black [84].
(c)whether the individual notified banks, utility companies and others of a change of address, and whether information like driver's licence address and electoral roll details were updated;[97]
(d)respective rights in respect of multiple properties;[98]
(e)the consumption of utilities at the property;[99]
(f)the nature of insurance held for each property;[100]
(g)as stated, where an individual eats, drinks and sleeps.[101] The place where a person sleeps, in particular, is 'a material and important consideration in working out where they reside'.[102] However, merely sleeping in a place does not make it a residence;[103]
(h)where a person entertains;[104]
(i)where clothing, furniture and possessions are kept;[105]
(j)the extent to which the house is furnished;[106]
(k)where family members reside;[107] and
(l)the strength of ties and connection with the residence.[108]
[97] Abela [30]; Zinno v Commissioner of State Revenue [2004] VCAT 1707; (2004) 56 ATR 630, [7] (Zinno).
[98] Black [84]; Mesiti [61].
[99] Tobin v Chief Commissioner of State Revenue [2009] NSWADT 188; (2009) 77 ATR 346 (Tobin); Nakhoul [27].
[100] Tobin [18]; Black [84].
[101] Burdinat [31]; Black [84].
[102] Acitino [43].
[103] Zinno [10]; Nakhoul [33]-[34].
[104] Chuang [22]; Nakhoul [27].
[105] Chuang [21]; Nakhoul [27].
[106] Abela [30]; Zinno [10].
[107] Black [84]; Mesiti [61].
[108] Black [84]; Mesiti [61].
It is permissible to take into account evidence provided by friends and relatives, but objective evidence carries the greatest weight.[109]
[109] Abela [32].
The full range of considerations and context must be considered. In Fincher v Commissioner for ACT Revenue, the Administrative Appeals Tribunal of the Australian Capital Territory set out that:
A person may establish a place of residence in such a frugal manner if the context and the later events demonstrate an intention that the place be a place of residence.[110]
[110] Fincher v Commissioner for ACT Revenue (1996) 32 ATR 1213, [9]; Ferrington [37].
The focus of the inquiry under s 21 of the LTA Act is the living circumstances of, in this instance, the Applicants, as at the Relevant Dates. The cases suggest that events in the period of at least six months either side of the relevant date may inform the question of whether the exemption should apply.[111]
[111] McIntosh Brothers Pty Ltd v Chief Commissioner of State Revenue [2019] NSWCATAD 124, [9], a case involving a claimed tax exemption on the basis that the land was being used for primary production; see also Leda Manorstead Pty Ltd v Chief Commissioner of State Revenue [2010] NSWSC 867; (2010) 79 NSWLR 724 (Gzell J).
The cases caution against taking a 'one size fits all' approach. That is to say, factual findings made in one case should not be simply transposed into other cases which derive from very different factual contexts. Ultimately, each case turns on its own factual matrix and the answer to any one case is unlikely to lie in the conclusion reached in another. In each instance, it is a matter of putting the relevant facts together.[112]
[112] Acitino [32].
The Respondent submits, and I accept, that drawing all these threads together, s 21 of the LTA Act, in its statutory context, makes it clear that the exemption is available where an allotment upon which a private residence is located and is owned and used by a natural person as his or her only or primary place of residence (ordinarily being the place where they eat, sleep and has as their usual or settled abode).
Applicants' case
The Applicants' case is that both Chris and Zifko lived continuously at the Subject Lot throughout the Relevant Dates which is evinced by:
(a)the residence on the Subject Lot being furnished;
(b)the vehicles being garaged at the Adjoining Lot because there is no driveway, carport or garage at the Subject Lot;
(c)all relevant utilities being connected at the Subject Lot; and
(d)their personal belongings including cutlery; crockery; glassware; clothes; shoes, toiletries, sheets and blankets are located at the Relevant Lot.
The Applicants:
(a)operate a property leasing business at the Charles Street Lot, via Region Developments Pty Ltd, Australasian Land Corp Pty Ltd, Capeen Pty Ltd, Leray Pty Ltd and Sarros Holdings Pty Ltd;
(b)together with their associated entities, own a considerable number of residential properties in the Carine area (and elsewhere) many of which are leased, but some are vacant;
(c)together manage 20 residential properties and six commercial properties (which contain 14 separate units themselves) and spend most of their time (during the day or night as required) attending to these, including collecting rent, undertaking repairs or maintenance in the Carine area; and
(d)have family and friends near Westminster whom they visit regularly.
Chris' case
Chris says that, since 2010, there have been difficulties in his marriage. He is estranged from his wife. This necessitated him leaving 2 Esla Place in May 2016 to live with Zifko at the Subject Lot.
Chris visits his family at 2 Esla Place where he also maintains the gardens, tennis court and pool.
Zifko's case
Zifko has, at different times, lived at the Subject Lot and the Adjoining Lot. Zifko's son lives at the Adjoining Lot and has been diagnosed with a range of medical conditions. Zifko spends a considerable amount of his spare time at the Adjoining Lot performing housework, including cleaning or socialising with his son.
However, to have his personal space, Zifko spends his nights and sleeps at the residence on the Subject Lot.
Applicants' submissions
The Applicants concede they have not been diligent in all regards to updating their current address with all government agencies, or third parties. In Chris' case, he continues to receive bills at 2 Esla Place.
The Applicants submit that their use of the residence on the Subject Lot is not typical. For example: the Applicants work long hours running their leasing business and they do not live with other family members at the Subject Lot; they do not cook meals and Zifko does not shower (at all).
Even though their use of the Subject Lot is not typical, four neighbours have made statutory declarations that the Applicants live at the Subject Lot.[113]
Consumption of utilities
[113] Exhibit 2, pages 123-124, 1130-1131.
The Applicants submit that their consumption of water and electricity is contextual to their lifestyles, their use of the offices at the Charles Street Lot or the property at 6 Doriot Way, Carine. They also submit there is no lawn, reticulation or pool at the Subject Lot.
The Applicants also direct attention to two water meter readings (on 12 October 2016 and 12 October 2017) whereby water usage was more than at other times (95 kilolitres and 26 kilolitres respectively). The Applicants submit that the Respondent does not explain why these readings were excluded from the calculation of the average daily use of the Subject Lot. The Applicants did not report any leaks to the Water Corporation until September 2019. The Water Corporation advised the water meter was faulty.[114]
[114] Exhibit 2, page 1129.
In terms of electricity, the primary consumption would be for the refrigerator, freezer and television.
Mobile telephone usage
Chris's case is that he is frequently in Carine where he owns, or conjointly owns, numerous tenanted properties. His family lives at 2 Esla Place, Carine and he also maintains that property.
Chris regularly attends 6 Doriot Way, Carine. He makes and receives calls from this address. The property is very close to 2 Esla Place.
Immigration records
Chris says he permitted his daughter to complete incoming passenger cards between 2016 and 2018. He did not check the details of his address or contact phone number on the cards that he signed.
Since 8 January 2018, Chris has completed his own incoming passenger cards.
Insurance arrangements
The Applicants' furnishings and personal belongings are of limited value. Insurance for the building and contents on the Subject Lot is held by both Applicants.
Land tax
The Applicants also submit that, irrespective of the outcome of this review, they will still be liable to pay land tax. The review will determine which of their properties will be exempted under the LTA Act.
Respondent's case
Zifko
The Respondent contends that, viewed objectively, Zifko's intention throughout the Relevant Dates was not to occupy and use the Subject Lot on a permanent basis so as to make it his principal place of residence. Rather, Zifko's intention was to use the Subject Lot in a nominal and perfunctory manner so as to obtain a land tax exemption for the Subject Lot.
The Respondent's case is that throughout the Relevant Dates:
(a)the Subject Lot was furnished in a basic fashion and held Zifko's personal possessions;
(b)Zifko used the Subject Lot's address as his residential address for a number of purposes including tax returns, utilities correspondence and for electoral purposes;
(c)Zifko maintained close association with the Adjoining Lot to be close to, and to assist, his son. The result being that Zifko would routinely eat and drink at the Adjoining Lot;
(d)Zifko, having regard to utilities consumption, did not sleep at the Subject Lot consistently, if at all. This is because:
(i)in terms of water, there was no change in consumption at the Subject Lot between 9 April 2013 and 12 February 2016 (when Zifko was not residing at the Relevant Lot) as between 12 February 2016 and 10 August 2018;
(ii)in terms of electricity, the average consumption decreased for the Adjoining Lot between 1 June 2016 to 8 August 2018 as compared to the period 31 May 2013 to 1 April 2016, but not to such a degree that would evince significant change in the character and pattern of use at the Adjoining Lot;
(e)the consumption of utilities was far greater at the Adjoining Lot as compared to the Subject Lot;
(f)utilities consumption at the Adjoining Lot was consistent with multiple people (being two) residing at the Adjoining Lot as compared to the Subject Lot. This is because, during the Relevant Dates:
(i)between 12 February 2016 to 10 August 2018, 197,000 litres of water were used at the Adjoining Lot, being an average of 216 litres per day; and
(ii)between 1 June 2016 and 8 August 2018, the average daily consumption of electricity for the Adjoining Lot was 8.75 kWh.
(g)utilities consumption at the Subject Lot was so low that it is doubtful that even one person was using it as a primary residence. This is because, during the Relevant Dates:
(i)an average of 28 litres of water was used per day at the Subject Lot. The Water Corporation guidelines,[115] at the very least estimate an average person consumes 68.12 litres of water per day;[116]
(ii)an average 3.5 kWh of electricity was used per day at the Subject Lot. Based on guidelines published by Synergy,[117] at the very least, an average person consumes 4.07 kWh of electricity per day.[118]
[115] Exhibit 2, pages 1265 to 1301.
[116] Based on showering, toileting and washing clothes. It does not factor into account water used for washing hands, cooking, house cleaning or gardening.
[117] Exhibit 2, pages 1261 to 1264.
[118] Calculated on the basis that a person uses a small fridge, washes clothes once per week and uses the stove once per day. The figure does not factor into account electricity used for air conditioners, lights, electric hot water systems and other electrical appliances such as televisions etc.
During the Relevant Dates up until 18 January 2018 (the date on which the Applicants were informed by the investigating officers of the significance of insurance information for the purposes of the exemption under s 21 of the LTA Act):
(a)there was no contents insurance held for the Subject Lot; and
(b)the vehicle insurance policies for 1CLM### and 1CYL###, both registered to Zifko, nominated that the vehicles were both 'kept overnight' at the Adjoining Lot.
Throughout the Relevant Dates, the investigating officers randomly visited or drove past the Subject Lot. The investigating officers observed that on all but one occasion, Zifko's vehicles were parked at the Adjoining Lot. On that one occasion, one of his vehicles was parked at the Subject Lot.
The Respondent submits that the most accurate indicator of where a person eats, drinks, sleeps and has his or her usual abode is provided by objective evidence such as utilities consumption, as opposed to what address a person nominated as his or her residential address. Consequently, the Tribunal ought to give greater weight to the utilities data and mobile telephone usage evidence.
In Zifko's application for an exemption, he stated that he commenced residing at the Subject Lot in 2012. However, the Respondent contends:
(a)for the period 31 May 2013 to 1 April 2016, the average daily consumption of electricity for the Subject Lot was 0 kWh; and
(b)for the period 9 April 2013 to 12 February 2016, an average of 0.96 litres of water per day was consumed at the Subject Lot.
Following making his application for exemption, Zifko did not engage with Revenue WA or its investigating officers, despite numerous requests to do so. Ultimately, investigating officers served Zifko with a notice pursuant to s 95 of the TA Act requiring him to attend an examination with investigating officers. Zifko did not attend the examination but provided a medical certificate that he was suffering stress.
The Respondent submits that Zifko was not using the Subject Lot as his primary residence. Rather, Zifko's primary residence, throughout the Relevant Dates, was the Adjoining Lot.
Chris
Similar to Zifko, Chris claims that he occupied the Subject Lot as his primary residence during the Relevant Dates.
The Respondent's case is that, viewed objectively, Chris' primary intention, with respect to the Subject Lot was not to actually occupy and use the Subject Lot as his principal place of residence. Rather, Chris' intent was instead to occupy and use the Subject Lot in a very nominal or perfunctory manner, so as to obtain a land tax exemption for the Relevant Dates.
The Respondent contends that although during the Relevant Dates:
(a)the Subject Lot was (very basically) furnished, and contained some personal possessions; and
(b)the Subject Lot was used as his address for a number of purposes, including his Department of Transport correspondence, for electoral purposes and utilities,
Chris did not use or occupy the Subject Lot as his primary residence.
Rather, during the Relevant Dates, Chris maintained a strong and close association with 2 Esla Place. This is evident because:
(a)Chris admits to spending time at 2 Esla Place to be with his wife and children;
(b)during the Relevant Dates, the Optus geodata evinces that Chris spent 90% of nights in the vicinity of 2 Esla Place. This, the Respondent contends, is a strong indicator that Chris was sleeping at 2 Esla Place throughout the Relevant Dates;
(c)during the Relevant Dates, utilities consumption at 2 Esla Place was consistent with multiple people using the property as a residence as compared to the Subject Lot. This is because:
(1)the consumption of water and electricity at the Subject Lot was very low such that it is doubtful that even one person was using it as their primary residence. For example, during the Relevant Dates:
(i)an average of 28 litres of water was used per day at the Subject Lot. According to water usage guides published by the Water Corporation,[119] at the very least an average person consumes 68.12 litres of water per day;[120] and
(ii)an average of 3.5 kWh of electricity was used per day at the Subject Lot. According to electricity usage guides published by Synergy,[121] at the very least an average person consumes 4.07 kWh of electricity per day;[122]
(2)the consumption of water and electricity at 2 Esla Place was consistent with multiple people using the property as a residence:
(i)for the period 22 February 2016 to 22 August 2018, 1,115,000 litres of water was used at 2 Esla Place, at an average of 1,224 litres per day; and
(ii)for the period 3 May 2016 and 5 September 2018, the average daily consumption of electricity for 2 Esla Place was 29.35 kWh.
[119] Exhibit 2, pages 1265 to 1301; refer footnote 109 above.
[120] Exhibit 2, page 1265.
[121] Exhibit 2, pages 1261 and 1264.
[122] Refer footnote 111 above.
Up until 18 January 2018 (the date on which Chris was made aware of the investigation):
(a)there was no contents insurance policy held for the Subject Lot;[123]
(b)the vehicle insurance policy for 1DRL###, registered to Chris, nominated that it was kept overnight at 2 Esla Place;[124] and
(c)the vehicle insurance policy for 1DSP###, registered to Australasian Land Corporation Pty Ltd, nominated that it was kept at No 2 Esla Place. That address has not been amended throughout the Relevant Dates.
[123] On the day that Chris was notified of the importance of insurance for the purposes of the land tax exemption, namely on 18 August 2018, the Applicants added $10,000 of contents insurance in relation to the Subject Lot.
[124] Five days later, having been advised by investigating officers of the importance of insurance for the purposes of the land tax exemption on 18 January 2018, the insurance policy for vehicle 1 DRL### was amended to nominate the Subject Lot as the 'address where car kept overnight'.
The Respondent submits that Chris spends little time at the Subject Lot. By his own admission, Chris eats out six times a week and does not cook at the Subject Lot. He showers at the Charles Street Lot and spends time at 2 Esla Place, seeing his wife and family.
Although Chris asserts that he sleeps at the Subject Lot, the Optus geodata for the Relevant Dates reveals that he spends less than 10% of his nights in the vicinity of the Subject Lot as compared to 2 Esla Place which, the Respondent contends, suggests that Chris sleeps at 2 Esla Place most of the time.
The contention that Chris' actual primary residence is 2 Esla Place is further supported by:
(a)the high level of water consumption at 2 Esla Place as compared to the Subject Lot;
(b)the high electricity usage at 2 Esla Place as compared to the Subject Lot;
(c)the increasing contents insurance held for 2 Esla Place during the Relevant Dates, despite Chris' assertion that he was using the Subject Lot as his primary residence (which would have necessitated him moving his personal belongings and items to the latter);
(d)the identification of 2 Esla Place 'as the address at which he intends to reside' on Australian Border Force incoming passenger cards from 10 January 2014 to 8 January 2018;[125] and
(e)the identification of the landline at 2 Esla Place as his contact number for all Australian Border Force incoming passenger cards from 10 January 2014 except those dated 7 January 2017, 8 January 2018, 17 July 2018 and 23 October 2018 which listed a mobile telephone number.
[125] The only Australian Border Force incoming passenger cards which listed the Subject Lot as Chris' intended address were those dated 17 July 2018 (which was the first card completed after investigating officers had alerted the Applicants to the importance of evidence suggesting they were using and occupying the Subject Lot as their primary residence).
The Respondent submits that the most important indicator of where a person eats, drinks and sleeps and has as their usual abode is provided by objective evidence such as the consumption of utilities as well as information gleaned from mobile telephone data, as opposed to the address that one nominates as being their residential address.
Consequently, the Tribunal ought to give greater weight to the utilities and mobile telephone data usage evidence in this matter.
Evidence
In this matter, I head from the following witnesses:
Applicants
(a)Zifko Sarros;[126] and
[126] Exhibit 6.
(b)Chris Sarros.[127]
[127] Exhibit 5.
Respondent
(c)Sean Saunders from Revenue WA;[128]
(d)Kanako Sato from Revenue WA;[129] and
(e)Jack Lee from Revenue WA.[130]
Overview of the evidence
Zifko's evidence
[128] Exhibit 8.
[129] Exhibit 9.
[130] Exhibit 7.
Zifko is 81 years old.
Zifko's evidence sets out his relevant interests in a range of properties, which I have set out at [17] above.
Zifko explains that he lived at the Subject Lot from a young age. He was married in 1964 and, at the time, he and his wife lived at the Subject Lot. His son was born in 1966 and his wife left them within a year.
The dwelling on the Subject Lot contains two bedrooms. One bedroom is his. There is no carport or driveway.
When his son was about 12 years old, they moved to the Adjoining Lot. He cared for his son with some assistance from his father, who had moved into the Subject Lot.
Zifko explains that his son lives in the Adjoining Lot. In 2011, a caretaker living at the Subject Lot moved out. In 2012, he moved from the Adjoining Lot to the Subject Lot. It was modestly furnished.[131]
[131] Exhibit 6, para 30.
Water and power are connected to the Subject Lot, but not gas. A telephone line was connected in around 2015. The line was disconnected in 2020, as it was not used.
Vehicle 1CLM### is insured by Australian Associated Motor Insurers (AAMI). Zifko advised AAMI that the vehicle was kept overnight at the Adjoining Lot. Later, on or about 18 January 2018, he advised AAMI that the vehicle was kept at the Subject Lot. Nevertheless, he continues to park the car overnight at the Adjoining Lot.[132]
[132] Exhibit 6, para 40.
Vehicle 1CLY###, which used to be driven by his son, is parked overnight at the Adjoining Lot. A tractor is also at the Subject Lot, which is used for fire-break purposes. There is also an unregistered vintage truck parked at the Subject Lot which he and Chris plan to restore.
Zifko has friends in the Westminster area with whom he is in regular contact. He spends many evenings out visiting friends or with his son. He sleeps at the Subject Lot.
Zifko says he has the newspaper delivered and has always insured the Subject Lot but does not have records of this. From around October 2015, the Subject Lot has been insured for $200,000 with contents of $10,000 by St George.
From around May 2016, Zifko says that Chris came to live with him. Chris did not bring furniture other than a bed, as the premises were furnished. There is a reverse cycle air conditioner which, if used, would be in the evenings as Zifko is out during the day.
Food and drink are kept at the Subject Lot including tea, coffee, bread, cereals as well as drinks and ice cream.
Zifko explains that most of his clothes are laundered, and he hand washes some clothes, such as his underwear. He also handwashes his bed linen and tea towels. There is no lawn or garden (or reticulation) at the Subject Lot.
Zifko says he is a social person and, unlike other people, does not spend a lot of time at home. He enjoys spending time with his son, family and friends.
He does not cook at the Subject Lot. He either goes out or eats take out. Sometimes he eats at the Adjoining Lot.
Zifko does not shower. He uses a wet cloth with soap to clean himself.
Zifko's son has lived at the Subject Lot or the Adjoining Lot for his entire life. Zifko's son suffers from a range of medical conditions which requires Zifko to 'provide a lot of assistance' including shopping and cleaning.[133] His son runs an electric heater year-round. Zifko checks to see that his son is safe around the heater.
[133] Exhibit 6, para 63.
Zifko socialises with his son and checks on him every day. He spends 'a considerable amount' of his spare time looking after his son and performing housework.
Zifko also explains that he has not contacted the Water Corporation in relation to any leaks and there have been no pipe repairs at the Subject Lot. In around September 2019, following a call from Chris, the Water Corporation replaced the water meter.
Chris' evidence
Chris is 79 years old and is a licensed real estate agent. He married in 1978 but the marriage encountered problems in 2010. He has not lived with his wife since 2016.
In May 2016 he decided to live with his brother at the Subject Lot which they conjointly own. He took his personal possessions to the Subject Lot.
From about 2014, he owned vehicle 1DRL### until about May 2020. This car was insured by AAMI. On or about 23 January 2018, Chris advised AAMI that the vehicle would be kept overnight at the Subject Lot.
He did not advise AAMI in May 2016 of the change of address. He says it was a minor detail that he did not get around to.
His wife and son live at 2 Esla Place, which includes a tennis court and swimming pool. The size of 2 Esla Place is 1,367m2. The premises are insured by different providers including Vero Insurance and IAL (Berkshire Hathaway). Three cars are generally kept at the property. Chris still looks after 2 Esla Place, including the tennis court, pool and gardens. He also visits his family at 2 Esla Place. On rare occasions, once or twice a year, Chris will stay at 2 Esla Place.
Chris says that 6 Doriot Way, Carine is used to store a variety of tools and spare parts (lawn mowers, old furniture and an analogue TV) which are kept for use in the business to repair and maintain leased premises. Chris says he frequently attends 6 Doriot Way to collect or drop off tools and spare parts. He may also stop in at 6 Doriot Way between meetings and also to take and make phone calls.
The Charles Street Lot is used to operate the business. It includes offices and a bathroom. The business does not employ anyone. Chris and Zifko do all the work. Chris showers at the Charles Street Lot on occasions.
Zifko's son lives at the Adjoining Lot. Since there is no garage at the Subject Lot, Chris garages his car at the Adjoining Lot as it is protected by a garage. Sometimes he parks his car on the verge of the Subject Lot. The Subject Lot and the Adjoining Lot are situated close together.
In terms of the Subject Lot, Chris explains that it had been furnished by Zifko. It has two bedrooms. The furniture is the same today as it was when he moved in May 2016. As at 15 October 2015, the Subject Lot was insured for $200,000 with contents insurance of $10,000 by St George Underwriting Agency.
Chris does not wash his clothes at the Subject Lot but has them pressed instead. He does not have any receipts. He washes his bedsheets and towels by using the washing machine or basin. There is reverse cycle air conditioning at the Subject Lot, although it is not used much, except sometimes in the evenings.
Chris says he does not use the dwelling at the Subject Lot in the same way that other people use their own home. He says he is a social person and enjoys spending time with family and friends. Even though he is estranged from his wife, he still visits his family and travels on holidays with them. He does not cook meals and eats out six nights a week. He also does not east dinner sometimes due to a large lunch.
Chris showers once a day, the vast majority of the time at the Subject Lot. If he does not shower at the Subject Lot, he showers at the Charles Street Lot.
Chris says that the pattern of water consumption at the Subject Lot 'is gradual in relatively small amounts because there is no lawn or garden to maintain and there is no swimming pool'.[134] As a result of the limited use of water and electricity at the Subject Lot, the water and electricity bills are small.
[134] Exhibit 6, para 77.
Around mid-2015, the City of Stirling (City) was considering a scheme amendment to rezone land, including the Subject Lot. The proposed scheme amendment was initiated by the City. Chris understands that the City wishes to see vacant land at 122 Arkana Road, Westminster put to a higher use.
Chris banks with a major bank. There are credit cards issued which his wife and other family members use with Chris' authority.
Chris says that his incoming passenger cards (when returning from overseas) for the period between 2016 and January 2018 were prepared by his daughter. Chris says he signed the cards without checking the details of the address listed or relevant contact details. Since 8 January 2018, Chris completed his own incoming passenger cards and put down the Subject Lot as his address.
Since May 2016, Chris is not aware of any significant water leaks at the Subject Lot. In mid-September 2019, he contacted the Water Corporation over concerns the water meter was faulty. The meter was replaced.
Sean Saunders
Mr Sean Saunders has been employed at Revenue WA (formerly the Office of State Revenue) since 2011. He is presently an Assistant Senior Inspector and has been since 13 June 2016.
Assistant Senior Inspectors are responsible for carrying out land tax investigations to ensure compliance with the LTA Act.
Mr Saunders commenced the investigation into the Applicants' claim for land tax exemption for the Subject Lot on 22 November 2017. He asked Ms Kanako Sato to assist.
As a result of the investigation, land tax assessments were not issued for the Subject Lot for 2016/2017, 2017/2018 and 2018/2019 assessment years.
Since 2017, Mr Saunders has conducted numerous searches of the Landgate database and Nearmaps to view aerial photography of the Subject Lot and the Adjoining Lot. Those searches indicate that:
(a)the Subject Lot has an area of 2.71 hectares and is immediately adjacent to the Adjoining Lot. It has a value between $3.79 million - $4 million;
(b)the Adjoining Lot has an area of 751m2 and is valued between $405,000 to $470,000. On the land tax exemption application from Zifko, he also identified that the Adjoining Lot was his residence;[135]
(c)on the land tax exemption form completed by Chris, he indicated that he used 2 Esla Place as his residence too.[136] Throughout the Relevant Dates, 2 Esla Place was owned by Chris and his wife; and
(d)throughout the Relevant Dates, Chris and Zifko were the registered proprietors of the Charles Street Lot.
[135] Exhibit 2, pages 1 and 47.
[136] Exhibit 2, page 2.
Mr Saunders also explained that, throughout the entire investigation by Revenue WA into the land tax exemptions applied for by Chris, no mention was made that he owns or uses 6 Doriot Way.
Mr Saunders, together with Ms Sato, inspected each of the above properties (aside from 6 Doriot Way) for the purposes of:
(a)identifying evidence relevant to the Applicants' applications for exemption from land tax;
(b)understanding the extent to which the Applicants use the Subject Lot as well as the properties referred to above; and
(c)identifying other persons who may use the Subject Lot and the abovementioned properties.
In January 2018, Ms Saunders and Ms Sato undertook a number of site inspections as follows:
Date of inspection:
Observations:
11 January 2018 @ 9:10am
Drive by of the Subject Lot. Observed two vehicles (1CLM### and 1CLY###) and a trailer (1TRF###) parked at the Adjoining Lot. A note of the observations was made and typed up later that day.[137]
11 January 2018 @ 9:45am
Reattended the Subject Lot. Observed that 1CLY### remained at the Subject Lot. A note of the observations was made and typed up later that day.[138]
18 January 2018 @ 8:35am
Attended 2 Esla Place. Spoke to Chris' wife. Chris was not home.
18 January 2018 @ 9:45am
Observed Chris driving and parking a white sedan at the Subject Lot.
In a conversation with Chris, he was shown a Synergy bill for the Subject Lot evincing that only 2-day units per day had been consumed and was asked whether gas was connected. It was not. Chris said he showers at 327 Charles Street. Chris advised of his mobile number and that he sleeps at the Subject Lot and hardly ever sleeps at 2 Esla Place.
Chris was provided with a document[139] which listed information that was required to support the claim for the exemption such as copies of car insurance for vehicles 1DRL### and tractor with registration 8MX### as well as copies of the house and contents insurance policy for the Subject Lot and 2 Esla Place.
A note of the observations and conversations was made and was typed up later that day.[140]
19 January 2018
Attended the Subject Lot and undertook an internal inspection of the Subject Lot. Chris did not allow photographs to be taken inside. Notes were made during the inspection which were typed up later that day.[141]
During the inspection, Chris explained that:[142]
a) he sleeps at the Subject Lot but eats out and does not cook at the Subject Lot because he is social; and
b) he is separated from his wife and lives apart from her but still spends time at 2 Esla Place, to see his children.
6 March 2018
Attended 327 Charles Street and met with Chris and inspected the bathroom. Later that day, notes that were made of the conservation and observations were typed up.[143]
5 April 2018 @ 8:50am
Attended the Adjoining Lot and observed two vehicles (1 CLM### and 1 CLY###) and trailer parked in the driveway. Another vehicle was parked at the Subject Lot (1 DRL###). Notes were made and were typed up later that day.[144]
5 April 2018 @ 9:25am
Observed two white Mercedes-Benz vehicles parked next to each other in front of the Subject Lot. Notes were made and were typed up later that day.[145]
14 May 2018 @ 9:25am
Observed a vehicle registered to Zifko parked between the Subject Lot and the Adjoining Lot.
[137] Exhibit 2, page 945.
[138] Exhibit 2, page 946.
[139] The document is reproduced at Exhibit 2, page 73.
[140] Exhibit 2, pages 61 to 70.
[141] Exhibit 2, pages 93 to 96.
[142] Exhibit 2, pages 93 to 96.
[143] Exhibit 2, pages 99 to 104, 109.
[144] Exhibit 2, pages 111 and 117.
[145] Exhibit 2, pages 111 and 112.
On 14 February 2018, Chris informed Mr Saunders that he ate out at restaurants six nights a week.[146]
Data from the Water Corporation
[146] Exhibit 2, page 980.
Mr Saunders obtained information from the Water Corporation concerning connection/disconnection dates, all addresses associated with billing and connection, all contact persons/occupants, number of days bill and consumption data (including daily usage) for the Subject Lot, the Adjoining Lot, 2 Esla Place and the Charles Street Lot over various time periods.[147]
[147] Exhibit 2, pages 158 to 169, 171 to 172 and 175 to 180.
While the Applicants disputed the evidence of the inspection, and included photographs they had taken of the Subject Lot, both inside and outside, taken in October 2021,[260] I prefer the evidence of Mr Saunders and Ms Sato as it was produced during the Relevant Dates and at the commencement of the investigation.
[260] Exhibit 4, pages 1 to 30; ts 66, 2 March 2022.
That evidence suggests that while the Subject Lot was furnished at some level, it was furnished in a manner which, I find, indicated that it was only being used superficially and on occasion, not as, relevantly, Chris' primary residence.
Seventh, the hearing materials include a range of documents provided by the Applicants in support of their case. These include inter alia water and electricity bills for the Subject Lot. However, I am not sure the extent to which these assist the Applicants.
For example, the water bill issued on 9 August 2016 for the Subject Lot indicated that only 34 litres were consumed per day and that in the billing period prior to that, there was zero litres consumed per day. If Chris and Zifko were both living at the Subject Lot from May 2016, the level of water consumption seems remarkably low, indeed too low.[261]
[261] Exhibit 4, page 17.
Other documents provided by the Applicants included a licence renewal sent to Chris at the Subject Lot on 28 April 2016,[262] a letter from the Australian Electoral Commission to Chris dated 21 April 2016 (outlining that his electoral address was the Adjoining Lot) and a tax return for the 2014/15 tax year where Chris lists his home address as the Subject Lot.[263]
[262] Exhibit 2, page 16.
[263] Exhibit 2, pages 23 and 24.
The documents are indeed relevant, but I am not sure they assist Chris' case that from May 2016 throughout the Relevant Dates, he used the Subject Lot as his primary residence. All of the correspondence referred to above pre-date when Chris says he moved into Subject Lot. Zifko says that Chris moved in on 16 May 2016.[264]
[264] ts 88, 2 March 2022.
Viewed objectively, I find this various correspondence confirms that, relevantly, Chris has had an ongoing association, at some level, with the Subject Lot. That can be accepted. However, that is a different question as to whether it was his primary residence as at any of the Relevant Dates.
Chris' application - how I have weighed the evidence
Based on my findings set out above, I am not satisfied that Chris used the Subject Lot as his primary place of residence at any of the Relevant Dates.
As I have explained, in instances where an individual may have multiple places of residence, regard is to be had to each place of residence to establish which may be regarded as the primary residence. In my view, such an exercise represents an evaluative judgment having regard to all of the evidence.
I find the evidence in this matter establishes that Chris has some association with the Subject Lot throughout the Relevant Dates. It seems, since well before the Relevant Dates, he has had some kind of association with, and at some level used, the Subject Lot. For example, his licence renewals were sent to the Subject Lot and utility invoices were in both he and Zifko's name. That is hardly surprising as it seems the Subject Lot has been owned or associated with the family for many decades.[265]
[265] Exhibit 6, paras 23 and 24.
However, none of that means, necessarily, that Chris used the Subject Lot as his primary or principal residence as at the Relevant Dates. The fact that the utility bills are in sent to the owners of the Subject Lot (being Chris and Zifko) is hardly surprising. The fact that other documents are sent to the Subject Lot from time to time, while relevant, ultimately establishes nothing more than Chris has an ongoing association with the Subject Lot. As was observed in Abela:
Just as a short period of occupation may nevertheless have the requisite degree of permanence, a long period of very nominal or perfunctory occupation might never have had any degree of permanence to it, as would be the case for example where a person had purchased a property intending to 'land bank' it.[266]
[266] Abela [47].
In this case I have given the most weight to objective factors as I consider they, at least in the circumstances of this case, provide the best indication of whether, relevantly, Chris used the Subject Lot as his primary residence as at any of the Relevant Dates. I find he did not.
As I have explained, the geodata is, of itself, overwhelmingly against Chris. While this evidence was challenged, as I have set out, I do not accept the Applicants' concerns. It is evidence that I accept. Chris could have, but did not, call his own evidence to challenge this evidence, or the conclusions to be drawn therefrom. As I have indicated, the geodata evidence, which establishes that Chris was in the Carine area late in the evening for the vast majority of evenings through the Relevant Dates, is, I find, determinative of this matter. I have given the geodata the most weight in my consideration of Chris' application.
The other key factor which, I find, weighs heavily against Chris is the utilities consumption at the Subject Lot through the Relevant Dates. I find that these two factors, each considered separately, but moreover considered together, leave no room for argument that Chris was using the Subject Lot as his primary residence at the Relevant Dates for the purposes of land tax.
I accept that the intentions of Chris can be considered based on the principles set out in Ferrington.[267] However, such intentions are to be assessed objectively. Viewed objectively, the utilities consumption is, to my mind, clear evidence that Chris had no real intention to use the Subject Lot as his principal place of residence in any meaningful or tangible way.
[267] Messiti [59]; Cameron [46].
Added to this are the insurance details which also support the conclusion that Chris was not using the Subject Lot as his primary place of residence as at the Relevant Dates. However, I place less weight on this factor as compared to the geodata and the utilities consumption.
I have also given considerable weight to the incoming passenger cards. Up until Chris became aware of the investigation, he was quite content to sign declarations that his intended address in Australia was not the Subject Lot but was instead 2 Esla Place. The inference that arises is that his family (at least his daughter) considered he was still residing at 2 Esla Place during the Relevant Dates. I find this is further evidence that Chris' family, with whom he plainly has an affable relationship, did not recognise him as living at the Subject Lot in the sense that it was his primary residence.
Next, I have given the information gleaned from the inspection of the Subject Lot some weight. The inspection of the Subject Lot by Mr Saunders and Ms Sato in January 2018 is relevant in that it confirms and supports the other findings above. While that inspection did confirm the dwelling as furnished and contained personal possessions, the observations made and recorded during the inspection support the conclusion that Chris was only using the Subject Lot in a nominal and perfunctory manner in order to secure a land tax exemption.
In reaching this conclusion, I have also had regard to Chris' evidence. As I have stated, I find it is weak and flimsy. I find it is, in effect, little more than an explanation which tries to explain away the case put against him.
Rather than pointing to and relying on objective factors (such as geodata and utilities consumption), his explanation is that he is at 6 Doriot Way much of the time late in the evening and the reason why the residence at the Subject Lot is furnished only basically is because, in effect, he is social and eats out a lot (although no receipts were produced).
The reason why the water consumption is low, Chris says, is because all of his clothes are washed by a company (but didn't keep receipts). He washes his bed linen and shirts but does not say how often. He showers, apparently, at a number of residences but primarily at the Subject Lot (despite what the utilities consumption suggests).
As part of the investigation, and after, a total of four statutory declarations were furnished which suggested that Chris lived at the Subject Lot. However, no witnesses were made available to the Tribunal. As I also explained, the statutory declarations cannot simply be accepted because they do not sit comfortably with other evidence (such as the utilities consumption). Accordingly, I have given the statutory declarations little weight.
Furthermore, I accept that where someone entertains is relevant to the question of where someone's principal place of residence is.[268] The Applicants' evidence suggests that Chris regularly entertains at the Subject Lot. If that were so, that would have an impact on utilities consumption. Yet, as I have found, the utilities consumption at the Subject Lot was inconsistent with ongoing human habitation, much less a dwelling where there was regular and routine entertaining, even only a regular coffee.
[268] Chuang [22]; Nakhoul [27].
As I have set out above, I accept Chris has put forward some evidence which demonstrates he has had an ongoing association with the Subject Lot. That evidence is in the form of bills or other notices addressed to Chris at the Subject Lot. However, that, of itself, does not demonstrate that he was using the Subject Lot as his primary residence as at the Relevant Dates. It demonstrates only longstanding nominal and perfunctory use. I find Chris' use of the Subject Lot was a ritual of occupancy at some level while he was, in fact, living elsewhere in the sense explained in Abela.[269]
[269] Abela [37].
For the avoidance of doubt, I should add that the fact that the geodata for the first assessment liability date (being 30 June 2016) was not available does not result in a different outcome for that assessment year. I am more than satisfied on the other remaining factors, in particular the utilities consumption, that Chris was not using the Subject Lot as his primary residence as at 30 June 2016.
In short, Chris' case does not stand up against the case put against him by the Respondent. I am satisfied that the correct and preferable decision is to affirm the decision of the Respondent that as at each of the Relevant Dates, the Subject Lot was not Chris' primary residence for the purposes of s 21 of the LTA Act.
On the evidence before me, I am satisfied that Chris continued to use 2 Esla Place as his primary residence as at the Relevant Dates. Chris' reliance on 6 Doriot Way is far too convenient. It has all the hallmarks of a recent invention. Put another way, I consider he selected a place he owns that is close to 2 Esla Place, in order to mask the fact that he continues to reside there, for the purposes of this hearing.
The correct and preferable decision is to dismiss Chris' application for each of the Relevant Dates.
Zifko's application - my findings
I am required to apply the same legal principles to Zifko's application as for Chris.
However, Zifko's circumstances are very different to Chris'. The evidence plainly establishes that he lives in Westminster. The question for me is whether his primary residence is the Subject Lot as at any or all of the Relevant Dates. Having regard to Zifko's circumstances, if he was not residing at the Subject Lot, it can reasonably be deduced from the evidence that he was living at the Adjoining Lot with his son.
I have found Zifko's application more difficult to determine than Chris'. The geodata analysis that was so overwhelming against Chris, does not arise in Zifko's application.
My findings in relation to Zifko's application are as follows.
First, Zifko was cross-examined. He was taken to his conviction for giving false information to investigators in relation to his claim that he and Chris were living at the Subject Lot in July 2011. That statement was false. The Subject Lot was, in fact, rented out at the time.
In sentencing, the Magistrate rejected Zifko's stated belief that he was entitled to the land tax exemption for the Subject Lot. The Magistrate also highlighted that Zifko has had 'extensive involvement in property over the years [which] would indicate that [he] must have a very good idea of law relating to real estate, including taxation'. The Magistrate described Zifko's attempts at subterfuge of his real living arrangements as 'ham-fisted'.[270]
[270] Exhibit 7, Appendix A, page 23.
Whatever else may be said about that the relevance of that conviction in this context, it is not in doubt that from 2011 Zifko was aware that the Respondent had taken an interest in where he was residing and the fact that he had sought to claim a land tax exemption for the Subject Lot.
The point being, since his conviction for fraud in relation to land tax at the Subject Lot, Zifko has been on notice that in order for him to be able to lawfully claim that the dwelling on the Subject Lot is his primary residence, he must actually live there in a real and tangible sense.
Second, I find there is a compelling reason for Zifko to live at the Adjoining Lot given his son's long standing health issues. Whatever else may be said about Zifko, it is clear to me that he has a very strong, indeed admirable, sense of parental responsibility to his adult son.
Zifko was asked about his son who, as I have set out above, has been, and continues to be, unwell. Zifko says his son was suffering with three separate health conditions during the Relevant Dates.[271] From his son's birth in 1966 to 1978, Zifko lived at the Subject Lot. In 1978, he moved to the Adjoining Lot. Zifko has lived with his son until, at least, 2012.[272] At that time, his son was 46 years old. It is also the case that the Adjoining Lot contains a larger dwelling than the Subject Lot.[273]
[271] ts 79, 2 March 2022.
[272] ts 79, 2 March 2022.
[273] ts 80, 2 March 2022.
Zifko agreed that his son lived with him for a long time 'because he needed a lot of help and care' due to his medical issues.[274] Zifko agrees that he provides a lot of assistance to his son.[275] He says that he visits his son every day and to make sure that the electric heater, which is used every day, is kept at a safe distance. He agreed that if left alone for long periods, his son can sometimes do things that are not safe for him. As a father, Zifko needs to remind and warn him.[276]
[274] ts 80, 2 March 2022.
[275] ts 80, 2 March 2022.
[276] ts 80-81, 2 March 2022.
Zifko was taken to correspondence sent on his behalf by his lawyer to the Respondent.[277] That correspondence indicates that Zifko spends a 'considerable' amount of time at the Adjoining Lot.[278] In crossexamination, Zifko tried to retreat from that statement somewhat by suggesting that there were 'words [in the letter] that shouldn't have been put there'.
[277] Exhibit 2, page 1085.
[278] ts 81, 2 March 2022.
Nevertheless, Zifko agrees that he visits his son every day to socialise and to check in, including during the Relevant Dates.[279] In reexamination, Zifko said he 'does not spend considerable time at the Adjoining Lot'.[280]
[279] ts 82-83, 2 March 2022.
[280] ts 123, 3 March 2022.
I do not accept his evidence during re-examination. Up until his cross-examination (and re-examination) the evidence clearly established that Zifko played a key role in his son's life as his carer and also for social reasons. As a consequence of that, Zifko needs to be with his son on a very regular basis. It is for that reason that Zifko needs to be at the Adjoining Lot. Zifko's need to be at the Adjoining Lot brings me to the next issue I shall address, the consumption of utilities.
Thirdly, as with Chris, I find the utilities consumption at the Subject Lot is inconsistent with ongoing human habitation.
Because of the time he spent at the Adjoining Lot, it was put to Zifko that he was showering at the Adjoining Lot and not at the Subject Lot. Zifko responded that his washing habitats were 'very different'.[281] It was also put to Zifko that he was cooking at the Adjoining Lot, and not at the Subject Lot. Zifko's reply was that he purchases takeaway food.[282]
[281] ts 83, 2 March 2022.
[282] ts 84, 2 March 2022; ts 124, 3 March 2022.
It was put squarely to Zifko that during the Relevant Dates he continued living with his son at the Adjoining Lot to assist him. Zifko's reply was 'no, not really, no'.[283] Zifko maintained that he moved to the Subject Lot in 2012 and that Chris moved in May 2016.[284] I do not accept his evidence in this regard.
[283] ts 84, 2 March 2022.
[284] ts 84, 2 March 2022.
It was also put to Zifko that for a 10-month period (9 April 2013 to 7 February 2014) (a period which is outside of the Relevant Dates but at a time when Zifko's evidence was that he was living at the Subject Lot) there was no water consumed at the Subject Lot. Zifko explained that he believed the water meter was faulty.[285] The report to the Water Corporation was ultimately made on 12 September 2019.
[285] ts 86, 2 March 2022.
Zifko explained that he was 'happy not to get a [water] bill'. When asked whether he liked not getting bills; he explained 'they should be on top of the work'.[286] Zifko's evidence is, in effect, that the water meter readings over two years which show no water being consumed were wrong. However, because he liked not getting a bill, he did nothing.
[286] ts 87, 2 March 2022.
Zifko was questioned on water consumption at the Subject Lot. He agreed that general household cleaning and maintenance requires water. The following exchanges took place:[287]
[287] ts 89, 2 March 2022.
Ms Panetta:Do you accept that toilet use requires water to be used? When you use the toilet you're using water? ---?
Zifko:--- Well, it is required, yes.
Ms Panetta:And washing of hands requires water? ---
Zifko:It does.
Ms Panetta:Brushing of teeth requires water? ---
Zifko: Yes.
Ms Panetta:Washing of clothes requires water? ---
Zifko: Yes.
Ms Panetta:Washing of cutlery and crockery requires water? ---
Zifko:It all depends how much water.
Ms Panetta:Yes. Cleaning the bathroom requires water. Do you clean your bathroom at 10 Harkins Street? ---
Zifko:What are you talking about, cleaning the bath or the bath floor?
Ms Panetta:Surfaces, bath floor – mopping the floors, you know, cleaning the bathtub – there's a bathtub there. Do you use water when you clean bathrooms? ---
Zifko:Well, it requires some water, yes.
Ms Panetta:Yes. Mopping floors around the house requires water? ---
Zifko:Yes. It all depends how much you mop.
Ms Panetta:Yes. And making cups of tea and coffee requires - - -?
---
Zifko:Sorry, what was that? --- I said I might mop once a week or once a month or - - -
Between 14 August and 12 October 2017, the water consumption at the Subject Lot was only 26 kilolitres. That is a point in time when Zifko and Chris both say they were using the Subject Lot as their primary residence. Zifko's evidence was that the '[water] readings [were] not correct'.[288]
[288] ts 91, 2 March 2022.
It was put to Zifko that the water meter readings from 2013 to 2018 at the Adjoining Lot[289] were generally uniform throughout. Zifko's reply was that '[he] couldn't say'.[290]
[289] Exhibit 2, page 175.
[290] ts 93, 2 March 2022.
In terms of washing clothes, his witness statement sets out that 'most of my clothes are washed by a business called Pressed for Time,[291] but he does not keep receipts.[292] However, his oral evidence was that he washes most of his clothes himself.[293]
[291] Exhibit 6 para 52.
[292] ts 93, 2 March 2022.
[293] ts 93, 2 March 2022.
Zifko says he handwashes items and does not use a washing machine. He says he last used a washing machine some 50 years ago.[294] When asked why he moved his washing machine back from the Adjoining Lot if he had not used it for 50 years, his answer was he did it for 'space'.[295]
[294] ts 93, 2 March 2022.
[295] ts 94, 2 March 2022.
It was put to him that he regularly washed his clothes during the Relevant Dates and did so at the Adjoining Lot. He rejected that proposition.[296]
[296] ts 95, 2 March 2022.
Zifko's evidence is that he does not shower or bathe but instead uses a wet cloth to clean himself. He did not agree that he actually showered at the Adjoining Lot. He also did not agree that he went to the toilet at the Adjoining Lot. [297]
[297] ts 95, 2 March 2022.
In terms of electricity consumption, it was an agreed fact that between 30 June 2016 and 8 August 2018, the average daily consumption of electricity at the Subject Lot was 3.5 kWh. For the same period, the average consumption rate for the Adjoining Lot was 8.75 kWh.[298] Between 2013 to April 2016, the average daily consumption rate of electricity for the Subject Lot was 0 kWh.
[298] ts 98, 2 March 2022.
When these consumption rates were put to Zifko, his answers were that the Subject Lot had 'some LED lighting' and he also queried whether the readings were accurate.[299] Zifko could not 'agree or disagree' that the consumption of electricity at the Subject Lot, as compared to the Adjoining Lot, was minimal.[300] He did not agree that the reason why the electricity consumption was so low at the Subject Lot was because he was actually using the Adjoining Lot as his primary residence during the Relevant Dates.[301]
[299] ts 98, 2 March 2022.
[300] ts 99, 2 March 2022.
[301] ts 99, 2 March 2022.
Following these various exchanges about utilities consumption between Ms Panetta and Zifko at [414] above, I find I am not left with any impression of how Zifko 'lives' in the Subject Lot or, put another way, how he uses it as his primary residence. The questions put to him were straight-forward questions; they were not apt to mislead, confuse or trap. They were, in effect, questions about how he lived at the Subject Lot.
True it is that he did agree that ordinary day-to-day living requires water for a wide range of reasons. Nevertheless, he gave me no real impression or insight into how he lives his life at the Subject Lot (and more importantly, what was his routine in terms of how he lived his life (and thus consumed water)).
Rather than just agreeing that many household tasks necessitate the consumption of water, for example, his answers were, in effect, it depends on how you do it (which, of course, is no doubt correct). In relation to mopping, his answer was that it depends how much you do it and that he may do it once a week, or once a month. I struggle to understand how Zifko cannot be certain how often he mops at the Subject Lot.
Zifko owns, or co-owns, a large number of properties and he eats take out every night. He has his clothes pressed. There is nothing in the evidence to suggest that money is an issue. Indeed, it would appear he is financially very comfortable. So why is the water consumption so low? Why is the electricity consumption so low? The evidence establishes that he and his brother - living together - use less than half the electricity of that of his son who, Zifko says, lives alone at the Adjoining Lot.
On the Applicants' case, all of that is largely unexplained other than they say they do not use the Subject Lot in the way that others might. At the risk of being overly repetitious, I do not accept that explanation.
That is not to say that Zifko may not regularly have been attendance at the Subject Lot. Indeed, he probably was not infrequently at the Subject Lot. However, I find the evidence establishes that he was not, as a matter of fact and degree,[302] using it at his principal place of residence as at any of the Relevant Dates.
[302] Paspaley [61]; Cameron [46].
Fourth, as with Chris, Zifko's insurance arrangements are, I find, further evidence that he was not using the Subject Lot as his primary residence at any of the Relevant Dates.
Zifko was questioned about his car insurance arrangements. Despite his evidence that he moved into the Subject Lot in 2012, from 20 January 2015 to 18 January 2018, Zifko nominated the Adjoining Lot as the place where his vehicles were kept overnight.[303] The date of 18 January 2018 is not without significance. It was the date that the Applicants became aware of the Respondent's investigation.
[303] Exhibit 2, pages 357 - 376; ts 100 - 102, 2 March 2022.
Ms Panetta put to Zifko that to the extent that he says he parks his vehicles at the Subject Lot, he is not being truthful. Zifko says he is being truthful and that the arrangements are hard to describe because there is no fence.[304]
[304] ts 103, 2 March 2022.
It was also put to Zifko that the reason why he changed his car insurance arrangements on 18 January 2018 was because Chris had been made aware of the Respondent's investigation and Chris had told him of the importance of such documents in establishing where someone's primary place of residence might be. Zifko agreed that conversation with Chris may have happened.[305]
[305] ts 104, 2 March 2022.
Zifko denied he made the changes to his vehicle insurance arrangements on 18 January 2018 in order to bolster his claim for a land tax exemption.[306]
[306] ts 104, 2 March 2022.
He was also asked about home contents insurance for the Subject Lot which was, on the evidence, landlords' insurance.[307] His response was that he did not know and was not aware of that.[308]
[307] Exhibit 2, pages 231 to 250.
[308] ts 106, 2 March 2022.
In terms of contents insurance for the Subject Lot, it was put to Zifko that throughout the Relevant Dates, up until 18 January 2018, there was no contents insurance.[309] It was put to Zifko that on 18 January 2018, contents insurance for $10,000 was added. Zifko's reply was that the insurance arrangements for the Subject Lot were 'one big holus-bolus' but that it was not correct that the contents insurance was only added on 18 January 2018.[310]
[309] Exhibit 2, pages 224 to 230.
[310] ts 109, 2 March 2022.
Zifko's evidence in this regard cannot be accepted. The certificates of currency for the insurance clearly establish that only the building was insured up until 18 January 2018. While 'confirmation notes' were produced by the Applicants showing contents insurance for the 2015/16, 2016/2017 and 2017/18 periods, these 'cover notes' are not insurance certificates and moreover, each was produced on 18 January 2018, the date the Applicants were made aware of the Respondent's investigation.
The insurance certificates identified the correct insurance arrangements. The Subject Lot had no contents insurance up until 18 January 2018. Furthermore, I rhetorically ponder as to the utility in trying to seek retrospective contents insurance given that it would be a policy that could never be claimed on?
Fifth, there was, I find, a plain incentive for Zifko to attempt to claim the exemption that is available for one's primary residence.
Zifko was cross-examined about the financial benefits (or savings) that would accrue if the Subject Lot was his primary residence, given that its unimproved value is far beyond that of the Adjoining Lot. Zifko agreed that the Subject Lot is a lot more valuable, in terms of unimproved value, as compared to the Adjoining Lot.[311]
[311] ts 110, 2 March 2022.
It was put to Zifko that, contrary to his evidence, he did not move into the Subject Lot in 2012. What he did do instead is move some furniture back just to make it look like he was living there. Zifko did not agree.[312] It was put to Zifko that he had discussed the idea of shifting furniture around to make it look like he was living at the Subject Lot.
[312] ts 113, 2 March 2022.
Zifko was taken to the transcript from the Magistrates Court where in sentencing the Magistrate set out that:
Zifko then asked Mr Crotty to change what he had told to Mr Medefry about the living arrangements at 10 Harkins Street. Mr Crotty protested saying he had already told him he lived alone, but Mr Sarros said that that was only verbal, there was nothing in writing and Crotty eventually relented and rang Mr Medefry. He told Mr Medefry that Chris and Zifko also lived at 10 Harkins Street. Crotty said that later that day Zifko explained to him that if he lived at 10 Harkins Street, he wouldn't have to pay land tax for the property.
And, consequent upon that, there was a discussion [involving Zifko] about shifting furniture and cars around to make it look as though Zifko lived at [the Subject Lot].[313]
[313] Exhibit 7, Appendix 1, page 8; ts 115, 2 March 2022.
In this proceeding, Zifko's response was that Mr Crotty, the person who was living at the Subject Lot at the time when the offences were committed was 'pressurised by [the Office of State Revenue]. They wrote everything out for him; he was pressurised'.[314]
[314] ts 115, 2 March 2022.
Sixth, I have had regard to the factors which do go in Zifko's favour. These include the fact that the dwelling on the Subject Lot was, on inspection, found to be furnished and containing some personal possessions. However, as with Chris, that evidence establishes that the Subject Lot was only being used in a minimal and nominal way to, I find, obtain a land tax exemption. I have already explained why the statutory declarations cannot simply be accepted.
The evidence plainly establishes that Zifko has a much closer relationship to the Subject Lot than does Chris. As I will come to, he has the newspaper delivered to the Subject Lot and lives more proximate to it than Chris does.
I find Zifko does have an ongoing association with the Subject Lot, and I think it open to conclude, as I do, that he would attend the Subject Lot regularly, even often. However, that does not make the Subject Lot his principal place of residence for land tax purposes. I am not satisfied that he was using the Subject Lot as his primary place of residence, in a real and tangible sense, as at any of the Relevant Dates.
Zifko's application - how I have weighed the evidence
Like Chris, I find Zifko was an unreliable witness. I do not accept his explanation as to his living arrangements as at the Subject Lot. As I have found, the amount of utilities being consumed at the Subject Lot, throughout the Relevant Dates (leaving aside the two periods where water consumption did increase) is inconsistent with ongoing human habitation by two elderly adults.
I have given the utilities data the most weight in assessing Zifko's application. The water consumption rates contained at page 171 of the Respondent's Bundle are, I find, largely fatal to Zifko's claim that he has resided at the Subject Lot since 2012. There was, quite literally, no water used at the Subject Lot between 12 June 2014 and 12 February 2016. That fact, of itself, casts serious doubt on the extent to which I can accept any of Zifko's evidence in relation to his association with the Subject Lot during the Relevant Dates. Human habitation, at any level, requires water to be consumed. People need water to drink, to wash, to clean and to flush the toilet.
While the water consumption rates between 2014 and 2016 are outside of the Relevant Dates, the water being consumed during the Relevant Dates was also very, very minimal. The average consumption rate during the Relevant Dates was 158 litres per day. If the two outlier periods are removed, then the average consumption drops to 28 litres.
I accept the Respondent's submissions that 28 litres 'would barely cover three toilet flushes a day for each of Zifko and Chris'.[315] That does not leave any water for drinking, showering or cleaning. It just does not add up to human habitation in the sense of being a principal place of residence for anyone.
[315] ts 159, 3 March 2022.
In terms of the two 'outlier' periods between August and October 2016 and 2017, I agree and accept that the recorded water usage does indicate that the Subject Lot was being used in a practical sense at those times. However, the Applicants could not explain why their water consumption was, in a relevant sense, so elevated during these two isolated periods (other than to suggest the water meter was faulty). As I have explained in the context of Chris, I therefore consider it appropriate to regard these as two periods as unexplained anomalies.
The overarching impression I have, and the conclusion I reach in relation to the water consumption rates, is that the Subject Lot was not being used as a principal place of residence for either Chris or Zifko as at 30 June in either 2016, 2017 and 2018.
Likewise, in terms of electricity consumption, the average daily use was 3.5 kWh. While that consumption may be, as the Applicants submit, 'gradual and continual', it is also consistently very low. It is also true that some appliances do need to run constantly, such as refrigerators. That may explain the 'gradual and continual' consumption of power at the Subject Lot. As I have stated, on the Applicants' case, two elderly adults living together use less than half of the power than Zifko's son living next door.
The very low consumption of utilities is not explained away by Zifko on the basis that he says he eats take out and is social. A primary residence is one's home. It is where one spends a significant amount of time in the evenings, if only to sleep. A corollary of that is the incidental need to consume utilities such as water and power (noting that gas is not connected).
Zifko's case does not add up. I set out above that I am left with real questions as I grapple with these issues as to why the consumption of utilities is so low at the Subject Lot. Why is Zifko so frugal with his water consumption? Why does he say he only mops at the Subject Lot maybe once a month but cleans the Adjoining Lot once a week?[316] Why has he not used a washing machine in 50 years? Why does he say he prefers not to shower?
[316] ts 122, 3 March 2022.
The conclusion I have come to is that his evidence as to how he lives his life at the Subject Lot is not truthful. It is a fabrication that seeks to explain away the fact that the consumption of utilities is so low.
I find Zifko has created a narrative to explain away why so little water and power were being used at the Subject Lot so as to put together a claim for a land tax exemption for the Subject Lot. I find that throughout the Relevant Dates, Zifko lived at the Adjoining Lot with his son who he needs to care for.
The utilities consumption weighs heavily against Zifko's case.
The insurance arrangements also go against Zifko. I have given the insurance arrangements considerable weight in assessing Zifko's application. These arrangements demonstrate that Zifko kept his vehicles overnight at the Adjoining Lot (at least until he became aware of the Respondent's investigation) and that the only insurance held for the Subject Lot was landlords' insurance for the dwelling.
The observations and notes taken following the site visit by Mr Saunders and Ms Sato on 19 January 2018 also go against Zifko. While no photographs were permitted, these contemporaneous notes detail that the Subject Lot was furnished in only a very nominal way. I find these notes are of more evidentiary value than the photographs produced by the Applicants for the hearing. I have given these observations and notes some weight in reaching the conclusion I have.
In reaching my decision, I stress I have considered the evidence produced by Zifko which supports his case. As I have indicated, the statutory declarations cannot simply be accepted as accurate. The Applicants could of, but did not, call these witnesses and make them available to the Respondent. On their own and viewed against the wider picture established by the evidence, the statutory declarations can be given little weight.
I am also mindful of, and have had regard to, the evidence which demonstrates that Zifko has some ongoing association with the Subject Lot. For example, an account from a newsagent in October 2016 indicates Zifko has the West Australian delivered to the Adjoining Lot.[317]
[317] Exhibit 2, page 11.
That evidence may be accepted. However, it does not mean Zifko was using the Subject Lot as his primary residence, even though he maintained an association with it. In a practical sense, it would not be a long walk for Zifko to retrieve the newspaper each day from the Subject Lot. Adapting the language of Abela, like Chris, I find that Zifko was indeed 'observing a ritual of [some level of] occupancy [at the Subject Lot] while in fact living elsewhere'.[318]
[318] Abela [32].
Having regard to the utilities data and the insurance information, together with the notes from the inspection, I am satisfied that Zifko was not using the Subject Lot as his primary residence at any of the Relevant Dates. I find he was, in fact, living at the Adjoining Lot with his son at all relevant times.
It follows that the correct and preferable decision is to affirm the decision under review as it relates to Zifko across all the Relevant Dates.
Conclusion
I return to where I started and the observations in The Cobbler of Preston. Perhaps unfortunately, the obligation to pay tax is one of life's very few certainties.
I can readily appreciate why the Applicants would not want to pay land tax on such a large, and therefore valuable, allotment of urban land that is just sitting largely vacant and idle. However, in order to be exempt from land tax, the Applicants, as the owners of the Subject Lot, need to use it as their principal place of residence in a real and tangible manner.
As I have stated, as inconvenient as this decision is for their tax liabilities, I am satisfied on the evidence that the reality is that neither Chris nor Zifko used the Subject Lot as their principal place of residence as at any of the Relevant Dates. The correct and preferable decision is to affirm the Respondent's decision for both Applicants across all the Relevant Dates and to dismiss the Review.
I will hear from the parties as to the orders necessary to give effect to these reasons.
I certify that the preceding paragraph(s) comprise the reasons for decision of the State Administrative Tribunal.
DR S WILLEY, SENIOR MEMBER
18 NOVEMBER 2022
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