Saunders v Commissioner of State Revenue
[2023] QCAT 217
QUEENSLAND CIVIL AND
ADMINISTRATIVE TRIBUNAL
CITATION:
Saunders v Commissioner of State Revenue [2023] QCAT 217
PARTIES:
SAUNDERS (applicant)
v
COMMISSIONER OF STATE REVENUE (respondent)
APPLICATION NO:
GAR564-21
MATTER TYPE:
General administrative review matters
DELIVERED ON:
22 June 2023
HEARING DATE:
31 May 2023
HEARD AT:
Brisbane
DECISION OF:
Member McVeigh and Member Corrigan
ORDERS:
1. The Commissioner’s decision of 24 September 2021 is set aside.
2. The applicant is entitled to payment of the HomeBuilder grant of $25,000.
CATCHWORDS:
ADMINISTRATIVE LAW – ADMINISTRATIVE TRIBUNALS – QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL – whether the applicant was entitled to the HomeBuilder Grant
First Home Owner Grant and Other Home Owner Grants Act 2000 (Qld), s 25Q(3), s 60
APPEARANCES & REPRESENTATION:
Applicant:
Self represented
Respondent:
S Amos of counsel instructed by the Commissioner of State Revenue
REASONS FOR DECISION
Context for the applicant
Wedgewood Finance Pty Ltd owned land in Kingaroy (land). [1] Stephen Saunders (applicant) was the sole director of Wedgewood Finance Pty Ltd.
[1]Exhibit 9, p87.
On 16 July 2020 the applicant entered into a contract with John Provan Building Pty Ltd (building contract) for the construction of a home on the land. The date for commencement of the work under the building contract was 7 August 2020. [2]
[2]Exhibit 9, p109 – 142.
On 17 July 2020 the applicant signed a contract to purchase the land from Wedgewood Finance Pty Ltd (vendor).[3]
[3]Exhibit 9, p40 – 53.
On 1 August 2020 the applicant, at the request of the builder, made an advance payment to enable the builder to pay for steel.[4]
[4]Exhibit 3.
On 21 August 2020 the building certifier signed a Form 16 Inspection Certificate certifying the footings and slab of the home, which he had inspected on 13 August 2020.[5]
[5]Exhibit 9, p96 - 97
The applicant became the registered proprietor of the land on 8 September 2020.[6]
[6]Exhibit 9, p87.
On 17 September 2020 the building certifier signed a Form 16 Inspection Certificate certifying the frame stage of the home.[7]
[7]Exhibit 9, p58 – 59.
The applicant made an application for payment of a $25,000 grant under the Homebuilder scheme. His application was rejected. Following an internal review, the decision to refuse the grant was confirmed. The applicant filed an application to review in this tribunal.
The applicant argues that factors outside his control meant that he had not become the registered proprietor of the land by the time the foundations were laid and the first progress payment was made to the builder, but that he became the freehold titleholder prior to completion of the building contract.
Context for the Commissioner
The National Partnership on HomeBuilder Scheme
In 2020 the Australian government and the Australian states and territories were concerned about falling demand in the residential construction sector due to the COVID-19 pandemic. The Australian government agreed to enter into a national partnership with the states to establish a grant to support the residential construction sector.
On 4 June 2020 the Australian Government announced HomeBuilder. The stated purpose of HomeBuilder was to support the residential construction sector recover from the Coronavirus crisis. Relevantly, HomeBuilder was a $25,000 grant available to owner-occupiers who entered into a contract to build a new home as a principal place of residence, provided they met prescribed eligibility requirements.[8]
[8]Exhibit 9, P187.
The Australian Government provided funding for the payment of the grant in accordance with guidelines it established. In Queensland, the Commissioner of State Revenue (Commissioner) administered the grant by an administrative direction approved by the then Treasurer and Minister for Infrastructure and Planning on 30 July 2020.[9]
[9]Exhibit 9, p187.
Eligibility under the Grants Act
An applicant for a home builder grant was entitled to be paid the grant if:
(a)the applicant complied with the eligibility criteria for the grant under the home builder direction; and
(b)the transaction for which the grant was sought was an eligible home builder transaction; and
(c)the relevant requirement in relation to the eligible home builder transaction had been met.[10]
[10]s 25Q(3) First Home Owner Grant and Other Home Owner Grants Act 2000 (Qld).
Administrative Direction
Relevantly, an eligible transaction for payment of the grant under the home builder direction required:
(a)the existence of a comprehensive home building contract to have a new home built on land in Queensland:
(i) made by the freehold owner of land; or
(ii) made by a person who would, prior to the completion of the comprehensive home building contract, be the freehold owner of the land;
(b)the contract commencement date to be between 4 June 2020 and 31 March 2021; and
(c)the construction commencement date to be on or after the contract commencement date and within 6 months of the contract commencement date.[11]
[11]Exhibit 9, p187 Administrative Direction [1(b)].
Relevantly, the eligibility criteria for applications relating to a comprehensive home building contract under the home builder direction required, subject to certain exceptions, the applicant to be the sole registered freehold owner of the property:
(a)as at the contract commencement date; or
(b)no later than laying of the foundations or when the first progress payment was made.[12]
[12]Exhibit 9, Administrative Direction [23] p190.
An exception might be made if:
(a)due to factors outside the control of the applicant, such as third party delays with lodging or registering instruments of title, the freehold title had not been registered in the name of the applicant by the time the foundations were laid and the first progress payment was made to the builder; and
(b)the applicant’s freehold title was registered prior to completion of the comprehensive home building contract.[13]
Does the applicant meet the eligibility criteria?
[13]Exhibit 9, Administrative Direction [41]. p191.
Evidence
In deciding this application, the tribunal must reconsider the evidence before the Commissioner at the time the decision was made, unless it is necessary in the interests of justice to allow new evidence.[14]
[14]section 60 of Grants Act.
The applicant, who is not legally represented, made a number of statements and submissions expanding on the material before the Commissioner when the original decision was made. It is in the interests of justice to allow that material to be considered. The Commissioner did not object to the following becoming evidence:
(a)statutory declaration made 11 August 2021 (which was part of the evidence before the Commissioner);[15]
(b)response to the statement of reasons 22 February 2022;[16]
(c)application for fresh evidence.[17]
[15]Exhibit 1.
[16]Exhibit 2.
[17]Exhibit 3.
On 15 August 2022, by consent, the applicant was given leave to rely on five additional documents:
(a)email from the applicant to Dominic Benz, senior banking manager Westpac SME Banking dated 12 July 2020[18] which:
[18]Exhibit 4.
(i) advised that he wanted to transfer the Kingaroy property from the company to himself;
(ii) advised that he had engaged a conveyancing firm to prepare the transfer documents and that they required an independent valuation for the Stamp Duties office;
(iii) requested a copy of the valuation done by the bank;
(iv) sought details of the bank’s requirements;
(b)email from Dominic Benz to the applicant dated 13 July 2020[19] which:
(i) declined to provide the bank’s valuation;
(ii) explained the process which required a letter from the conveyancing firm;
(c)email from solicitors to the applicant dated 1 September 2020:[20]
(i) confirming that they had received comparative market analysis from the agent;
(ii) advising that stamp duty had been calculated at $1,925;
(iii) asking that funds be paid to their trust account;
(d)Westpac bank statement evidencing transfer of $1,925 from the applicant’s account to the account of his solicitors on 1 September 2020;[21]
(e)email from the Nanango electorate office to the applicant dated 24 May 2022.[22]
[19]Exhibit 5.
[20]Exhibit 6.
[21]Exhibit 7.
[22]Exhibit 8.
In these proceedings, in addition to the evidence before the Commissioner at the time the decision was made, we have considered the new evidence contained in Exhibits 2, 3, 4, 5, 6, 7 and 8 as it is necessary in the interests of justice to allow that evidence to be considered.
Common ground
It is common ground that:
(a)the applicant entered into a comprehensive home building contract to have a new home built on land in Queensland;
(b)the applicant was not the freehold owner of land at the time he entered into the contract;
(c)the contract commencement date was between 4 June 2020 and 31 March 2021;
(d)the applicant did not become the freehold owner of land until 8 September 2020;
(e)the foundations were laid and the first progress payment was made to the builder before 8 September 2020;
(f)the completion of the comprehensive home building contract occurred after the applicant became the freehold owner of the land.
The only issue
The only issue is whether the circumstances fall within the exception that, due to factors outside the control of the applicant such as third party delays with lodging or registering instruments of title, the freehold title was not registered in the name of the applicant by the time the foundations were laid and the first progress payment was made to the builder.
The Commissioner decided that the applicant did not meet the eligibility criteria because:
(a)the title of the property was not in his name until after the foundations were laid and the first progress payment was made;
(b)as sole director of the vendor, his actions, in particular allowing the builder access to the site to commence construction, resulted in him not being registered in the required time frame; and
(c)he had failed to provide documentation in support of his explanation of factors outside his control which caused the delay in registration.[23]
[23]Exhibit 9, p7 – 9.
In his statutory declaration made 11 August 2021 the applicant:
(a)explained that the delay in settlement was caused by Westpac;
(b)said that he had been told by Westpac staff that they were suffering slow processing of loan settlements during July to September 2020;
(c)referred to public statements on Westpac’s website that COVID issues were affecting its business nationally;
(d)said that Westpac had refused his request to provide a written statement explaining the reasons why it could not settle sooner than it did.[24]
[24]Exhibit 9, p37.
In his response to the statement of reasons made 22 February 2022 the applicant focused on the Commissioner’s refusal to accept that factors outside his control resulted in the freehold title not being registered in his name by the time the foundations were laid. His submission was that he had been treated unfairly by the Commissioner because:
(a)he had complied with the eligibility requirements in all but one respect;
(b)an unreasonable evidentiary burden had been imposed on him as he had no means to compel third parties, e.g., the bank, to give evidence to explain the reason for the delay; and
(c)he had provided his own sworn evidence reiterating what he had been told by officers of the bank.
In his application for fresh evidence the applicant broadened the scope of third parties bearing some responsibility for the delay to his solicitors, who in turn blamed the bank for not being ready to settle. He stated that:
(a)he had no dealings with the agent who his solicitor organised to obtain the valuation;
(b)the builder was very keen to commence work as he had no other work;
(c)he acted in a timely way when his solicitors told him that a valuation was necessary and again when they asked him to pay the stamp duty.
Was the delay in the applicant becoming the freehold title holder due to factors outside his control?
The applicant could not become the freehold title holder until the land was transferred to him. The Transfer could not be lodged in the Titles Office until stamp duty had been paid. Because the transfer was a related party transaction the duty could not be assessed until the dutiable value of the transaction was known. This could not occur until a valuation was obtained.
When the applicant’s solicitor told him that a valuation was required, he promptly attempted to get a copy of the valuation from the bank.[25] The applicant had no control over the bank. He could not force it to provide him with a copy of the valuation.
[25]Exhibit 4.
When his solicitors advised him that they had received the necessary comparative market analysis to calculate the stamp duty payable, the applicant deposited the funds that day. The applicant had no control over the time his solicitors took to obtain the valuation and assess the duty payable.
There is no doubt that the COVID-19 pandemic caused significant disruption to the residential construction sector and to businesses such as banks and solicitors. Indeed, the administrative direction recognised that there might be third party delays with lodging or registering instruments of title and provided an exception to the eligibility criteria to allow for such delays.
Rather than focus on events preceding the applicant becoming the freehold title holder, the Commissioner focused on events preceding the making of the first progress payment and the time the foundations were laid. The Commissioner argued that the applicant was not in a position to become the freehold title holder before the first progress payment was made on 1 August 2020; or before the footings were inspected on 13 August 2020, because the date for settlement of the contract of sale for the land was 17 August 2020. The Commissioner argued that there was no evidence of third party delays in the period up to 17 August 2020. On the contrary, the Commissioner argued that the delays up to 13 August 2020 were the applicant’s, acting in his capacity as a director of Wedgewood Finance Pty Ltd, as he:
(i) signed the contract of sale for the land with settlement due after the building work had commenced; and
(ii) allowed the builder to start work.
The argument that the date for settlement of the contract of sale for the land was 17 August 2020 ignores that possibility provided by the contract that settlement would be ‘on or before 30 days of the contract date’. Had Westpac released the valuation when asked on 12 July 2020 settlement might have occurred before 13 August. There is evidence, albeit hearsay, of third party delays in the period up to 13 August 2020. The applicant’s evidence is that he had been told by Westpac staff that they were suffering slow processing of loan settlements during July to September 2020.
There is no evidence that the applicant in his capacity as a director of Wedgewood Finance Pty Ltd received or granted a request by the builder to have access to the site. The applicant’s unchallenged evidence is that the builder was very keen to commence work as he had no other work and that the builder asked for and was paid in advance so he could buy steel. The inference we draw from this is that the builder took the risk of commencing work before the applicant became the owner of the site.
We see no basis to lift the corporate veil to have regard to the actions of the applicant in his capacity as a director of Wedgewood Finance Pty Ltd when the applicant has provided a better explanation of the reasons that the first progress payment was made to the builder and the foundations were laid before the applicant became registered as the freehold title holder. The builder’s conduct in commencing before the construction commencement date (as defined by the administrative direction) or the date for commencement of the work under the building contract, resonates with the concerns of the governments about falling demand in the residential construction sector due to the COVID-19 pandemic.
As to the Commissioner’s reasoning that the applicant failed to provide documentation in support of his explanation of factors outside his control which caused the delay in registration we are satisfied that the applicant did what he could in an endeavour to provide such documentation.
The applicant has no control over Westpac Bank. He has no means of compelling the Bank to provide an explanation of the reasons it took the time actually taken to conduct its part of the transaction. Nor does the applicant have any control over his solicitor. He has no means of compelling his solicitor to provide an explanation of the reasons it took the time actually taken to conduct its part of the transaction.
We are satisfied that the circumstances of this case fall within the exception that the freehold title was not registered in the name of the applicant by the time the foundations were laid and the first progress payment was made to the builder due to factors outside the control of the applicant, in particular due to third party delays with lodging or registering the instrument of title.
Orders
The Commissioner’s decision of 24 September 2021 is set aside.
The applicant is entitled to payment of the HomeBuilder grant of $25,000.
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