Storey v Chief Commissioner of State Revenue

[2006] NSWADT 313

CITATION:	Storey v Chief Commissioner of State Revenue [2006] NSWADT 313
DIVISION:	Revenue Division
PARTIES:	APPLICANT Kassia Storey RESPONDENT Chief Commissioner of State Revenue
FILE NUMBER:	066031
HEARING DATES:	30/10/06
SUBMISSIONS CLOSED:	10/30/2006
DATE OF DECISION:	11/07/2006
BEFORE:	Block J - ADCJ (Judicial Member)
CATCHWORDS:	First Home Owners grant - reversal of original decision
MATTER FOR DECISION:	Principal matter
LEGISLATION CITED:	First Home Owner Grant Act 2000
CASES CITED:	Chief Commissioner of State Revenue v Ferrington [2004] NSWADTAP41 2004 Gibson v Chief Commissioner of State Revenue [2006] NSWADT 211 Snow v Chief Commissioner of State Revenue (No 1) [2005] NSWADT 244
REPRESENTATION:	APPLICANT In person RESPONDENT S Benjamin, solicitor
ORDERS:	The decision under review is set aside.

REASONS FOR DECISION

Part A; Preliminary and Background

1 The Respondent seeks the repayment by the Applicant of an amount of $7,000 and being a first home owner grant (“the grant”) paid in accordance with the First Home Owner Grant Act 2000 ("the Act") to the Applicant in July 2003 in respect of the purchase of the residence situated at 40 Burrow Lane, North Lismore ("the Property").

2 The Tribunal had before it the documents produced in accordance with section 58 of the Administrative Decisions Tribunals Act 1997 and in addition to the documents originally produced certain additional section 58 documents. The Tribunal admitted into evidence exhibit A1 consisting of a number of photographs of the Property (and including the interior) and as exhibit R1 a Rental Bond Board search result.

3 The Respondent claims that the Applicant is obliged to refund the grant (together with certain additional amounts) because she did not within 12 months after her acquisition of the Property, and as required by former section 12 (1) of the Act, occupy it as her principal place of residence ("PPR"). It is relevant to note that the Act as subsequently amended requires, in broad terms, a period of residence of 6 months after acquisition, but this was not the law at the time of her acquisition of the Property. Section 12 (1) of the Act relevantly provided as follows: --

An applicant for a first home owner grant must occupy the home to which the applicant relates as the applicant’s principal place of residence within 12 months after completion of the eligible transaction or a longer period approved by the Chief Commissioner.
4 In addition to the grant, the Applicant also received the First Home Plus duty concession ("the duty concession"); the Respondent does not seek the payment of the amount of the duty concession because, as Mr Benjamin conceded, the Respondent accepts that the Applicant when she acquired the Property intended to occupy it as her PPR. It is the Respondent's contention that although the Applicant had that intention, she did not in fact occupy it as her PPR, as required by section 12 (1) of the Act (in its form at the relevant time), within the prescribed period of 12 months after acquisition.

Part B. The evidence of the Applicant

5 The evidence of the Applicant was lengthy and at times convoluted; it alone took up most of a full hearing day. The Applicant is 27 years old and a student at Lismore Southern Cross University (‘the University”) where she is engaged in the study of arts and education, and majoring in cultural studies and English. She anticipates that she will graduate at the end of 2007; her studies commenced in 2002.

6 The residence on the Property consists of 2 floors; the upper floor consists of 3 bedrooms and a veranda which can be closed in such manner that it becomes a fourth bedroom. The upper floor also includes, apart from a kitchen bathroom and toilet, a lounge and dining room area and 2 small verandas. The lower floor consists of a large sleeping and living area where the sleeping area can be curtained off so as to constitute a separate area, and a kitchen shower and toilet. There is also a single garage, a laundry (which has its own separate entrance) and a separate granny flat. Exhibit A1 consists, as I have said, of photographs of the residence itself and also of the interiors of the two floors.

7 The Applicant said that she first saw the Property in April or May 2003. Her reference in this context to May 2003 must have been incorrect because her application for the grant was made in April 2003. The price wanted by the owners, Mr and Mrs Serone, was $185,000. The Applicant was then not only a student at the University; she was also working on a part time basis (1 1/2 days a week and at $25 per hour) as an environmental education officer for the Coffs Harbour City Council (“the Council”). She had previously in the summer of 2002/2003 had a temporary, but full-time position, with the Council and when she earned $500-$600 per week.

8 The Applicant said that she had accumulated savings of about $5,000. She purchased the Property for $175,000; in respect of the purchase price she obtained a mortgage from Commonwealth Bank of Australia ("the Bank") in an amount of $140,000. In addition to her own savings, her parents provided her with $20,000; she also received the grant of $7,000. Later evidence before the Tribunal indicated that the grant was in fact paid in point of time after completion of the purchase. Mr Benjamin accepted that the Bank probably financed the grant and then recouped the amount of the grant, after completion of the purchase, and when the grant was paid. The evidence as to the amount paid for the Property and the manner in which it was announced is difficult to reconcile; this aspect however does not alter the fact that the Applicant exchanged contracts in May 2003 for the acquisition of the Property and completed the purchase in July 2003.

9 The Applicant said that she obtained in the mortgage from the Bank on the basis that she would be renting out a part of the Property (and she had been advised that she could obtain $260 per month for a part of it) and also the granny flat in respect of which she understood that she could hope to obtain between $130 and $140 per week. In respect of the mortgage her evidence was that the interest rate for the first 12 months was 5.2% rising thereafter to 6.7% and her mortgage repayments (originally interest only) were $800 to $900 per month.

10 Contracts were exchanged on the 8th May 2003 and completed on the 7th July 2003. Prior to completion of the acquisition of the Property, and on 6 July 2003 the Applicant entered into a Residential Tenancy Agreement ("the lease") with Kath Duncan and Tyren Laidlaw ("the tenants"). The lease in its terms was expressed to relate to "the main section of the house and unit" and "all sheds on the property and carport". The lease provided that occupation was restricted to 5 persons (and including the 3 children of one of the tenants). The rental was $720 per fortnight and the term was 6 months commencing on 15th July 2003. The tenants agreed to provide a rental bond of $1440.

11 The evidence of the Applicant was that the lease in fact related to the upper floor but not the lower floor and not the granny flat. The tenants stayed in the upper floor for the agreed period of 6 months and for periods thereafter but eventually left in December 2005 and leaving the premises leased to them in so untidy a condition that they agreed to forfeit of the rental bond of $1440 to the Applicant.

12 The section 58 documents were during the hearing numbered by Mr Benjamin and I propose to refer to documents in accordance with that numbering system. Page 14 is a statutory declaration by the tenants dated the 3 June 2005, a part of which reads as follows:

Ms Storey was residing at Barrow Lane when we met her for the first time on Saturday 5th of July when we inspected the house. We eventually moved in by mid July during which time Ms. Storey was dwelling in the house.

The electricity was still on in the previous owner’s name and we asked Ms Storey if we could have the power in our names for taxation purposes as Kath Duncan is a sole trader with a home office. We had it transferred straight into our names for sake of our record keeping.

Ms Storey used her mobile for phone calls- so we also had the land line changed directly into our names

Kassia Storey fixed anything that needed attention in the house.

13 The Applicant informed the Tribunal that because the tenants left on terms which were not friendly, they, the tenants were not prepared to give oral evidence. The statutory declaration in question is because its content was not subjected to cross-examination, of limited value, but given that the tenants and the Applicant were not related or associated not of no value at all.

14 It is convenient at this point to note that the section 58 documents also include statutory declarations by David Clayton ("Clayton") Tim Clewitt ("Clewitt") and Gary Hankinson, and in addition both of the Applicant's parents. Of all of these persons only the Applicant's father Jeffrey Storey gave oral evidence. (He explained that his wife had had to go to Melbourne to attend to their son's partner whose pregnancy has become difficult.) The Applicant did not furnish any explanation in respect of the failure to call any of the other witnesses and in particular Clayton. Mr Benjamin asked that all of the evidence in question (excluding that of Mr. Storey) be rejected. My view is that it should be accorded some but limited value.

15 The Applicant by arrangement with the sellers of the Property moved into the Property prior to completion. Her evidence in this connection was some respects contradictory and in particular as to when precisely she moved into the lower floor. She said that she moved in and started living there on 30 June 2003. Other evidence would tend to indicate that her furniture and effects were fully installed with the assistance of her parents a few days later on either 3 July 2003 or 4 July 2003 (her birthday). She was able to install a lounge, a refrigerator, stove and other items some of which, according to her father, might have been acquired from her brother. The possessions installed in the lower floor did not include a bed; the Applicant sleeps on a futon. Those possessions have remained in the Property ever since.

16 On 15 July 2003 the Applicant received a call from the Council asking her to take up a position with the Council in Coffs Harbour and so as to replace one of their employees who had gone overseas. The Applicant’s uncontested evidence was that the position was not applied for by her and was uninvited. The Applicant's view, based on advice received by her, was that work for the Council would in general terms be beneficial to her in her career, and in particular in the field of environmental matters and given her interest in that field; she accepted the Council's offer. Coffs Harbour is some 230 km distant from Lismore and so that and from that time and for some time thereafter the Applicant lived on a purely temporary basis and for varying periods with different persons in Coffs Harbour. Most notably she received accommodation from Clayton, a man in his 40s who also worked for the Council. His address (page 4 of the section 58 documents) is 111 Fiddaman Road. Emerald Beach ("the Emerald Beach address")

17 The Applicant's employment by the Council endured but in different positions until April 2004. She was originally employed as a sustainability payments officer but other positions occupied by her included that of environmental education officer, climate protection officer and sustainable transport officer. In April 2004 her employment by the Council came to an end because the Council no longer had a position for her. During this period the Applicant went back to the Property from time to time but lived for the most part in Coffs Harbour. I obtained the impression that she lived (although she did not use that expression) a "gypsy-like" existence out of a suitcase. Her best clothes were left at the Property; she said that she is frugal and has one suitcase of clothing only.

18 When she left the employ of the Council Clewitt offered her a position on his yacht. Clewitt took passengers (who paid contributions) on trips and including as far as Lizard Island. The Applicant said (although not convincingly) that this period on the yacht (some 3 months) complemented her studies to some degree and that during this period she continued her studies at the University, but through assignments sent to the University through the post.

19 In July 2004 the Applicant went to India (paying for the air ticket out of her savings) and for 2 months she worked in India for the International Society for Ecology and Culture.

20 In September 2004 the Applicant returned to Australia. She stayed with her parents for a week but then took up a position offered to her by Stephen Kiley in Coffs Harbour. Kiley started a business in pain management and the Applicant assisted him, having been trained in the necessary techniques by Kiley. She lived in Kiley's home in Emerald Beach.

21 The business run by Kiley was not successful and in January 2006 the Applicant moved back to Lismore and into the lower floor of the Property. The tenants had moved out, as have said, in December 2005 and new tenants occupied the upper floor at a rental of $340 per week. The granny flat was let to yet another tenant at a rental of $135 per week.

22 The new tenants in the upper floor, three young people who were social security recipients, were remiss as regards the payment of rent and in consequence of which it became necessary to the Applicant to take steps to have them ejected.

23 In July 2006 the Applicant moved from the lower floor into the upper floor. She currently lives in the upper floor with two lodgers who are students and who pay her $90 per week each.

24 The Applicant anticipated, as I have said, that she will complete her degree in 2007. She has arranged to serve an internship next year at an outside education centre.

25 The Applicant commenced her studies in 2002. It seems likely that she would have completed her studies by this time if she had not embarked on activities, some of which might aptly be described as adventurous. It is quite likely in my view that the Applicant took advantage of opportunities as they came up and even though they or some of them were peripheral and even though completion of her studies was thereby delayed. As to whether that conduct was prudent or desirable is not to the point.

26 The Applicant’s uncontested evidence was that she did not ever have any other PPR. She spoke of the Property in terms of considerable affection. It is situated, so she said, in an area which is ideal for the purposes of her proposed teaching career in the area where she has always lived and intends to live. It is close to town but at the same time has garden facilities and including in particular a rose garden established by the previous owners.

Part C; the Applicant's evidence; cross-examination

27 Mr Benjamin's lengthy and searching cross-examination of the Applicant revealed that there are aspects of the section 58 documents which at least on a prime facie basis are adverse to the Applicant.

28 His cross-examination revealed in the first instance some uncertainties as to dates and in particular the precise date on which the tenants first saw the Property. However it did not disturb the basic fact that they saw the Property and leased part of it before completion of the purchase.

29 A search of the electoral roll by the Respondent revealed that the Applicant had recorded her address as being at the Emerald Beach address. Her explanation was not altogether satisfactory. She said that she had through her work for the Council developed an interest in local politics and that she wanted to be able to vote in local elections in Coffs Harbour. That desire was not of course to the point. If she was not resident in Coffs Harbour she was not legally entitled to say that she was.

30 Exhibit A1 is a rental bond board search report which indicates that the bond in an amount of $1440 was lodged on 24 July 2003 and that the landlord was described as the Applicant and Clayton; their addressed was cited as the Emerald Beach address. The Applicant said that when she acquired the Property she did not employ a solicitor but that the conveyancing was outside her experience and knowledge and that she sought the assistance of Clayton. Clayton would appear to be something of a mentor to the Applicant. This does not explain why the address was given as the Emerald Beach address and it also does not reveal why Clayton was reflected as a landlord. Of course he was not and as to how or why this situation arose is not clear.

31 The fact that electricity accounts was sent to the tenants was explained on the basis that one of the tenants carried on a business in the upper floor and wanted to be able to deduct the electricity costs involved. Mr Benjamin made the point that the deductibility or otherwise of the electricity accounts did not depend on the tenant being recorded as the account holder for this purpose. This is so; nevertheless the statutory declaration by the tenants indicates that electricity was dealt with in this fashion because they desired it.

32 When the Applicant was asked what she paid in respect of electricity and in respect of her use of the lower floor she said that she paid $20 periodically but that she was "hardly ever there". Mr Benjamin contended that that factor was against the Applicant; in my view this was no more than the truth in that from 14 July 2003 the Applicant was almost invariably in Coffs Harbour and for a period of time thereafter.

33 The Applicant's evidence was that she did not have a landline in the Property because she relied on her mobile. The Applicant applied for the grant on 20 April 2003. Mr Benjamin cross-examined her as to the fact that her phone number as reflected in the grant application was that of a mobile but not her mobile. She said that the mobile number recorded was that of Clayton; she said also be that at some time she mislaid her own mobile. The use in this context of the Emerald Beach address was explained on the basis that Clayton was assisting her throughout.

34 A search of the RTA records revealed that the Applicant's address for her driving licence was recorded as being the Emerald Beach address. The Applicant said that her driving licence expired at a time when she was in Coffs Harbour and that in order to renew it, and which she had to do urgently, she required a document indicating an address. She said also that the only such document then in her position was one containing the Emerald Beach address and she used that address of this reason.

35 Mr Benjamin noted that the Applicant had indicated that she would be calling witnesses including Clayton; he referred to her letter dated 20 July 2006. Clayton was not called and, as I have said, no explanation was offered.

Part D; The evidence of Geoffrey Storey (the Applicant's father)

36 The most that could be said of Mr Storey's evidence is that it confirmed firstly that he and his wife contributed $20,000 to the purchase of the Property and that he had his wife helped the Applicant move into the lower floor. He said that his wife would have been much more explicit as to various relevant matters but that she was unfortunately unavailable because of the ill-health of their son’s partner thus requiring her to go to Melbourne to look after her.

Part E; The case law.

37 The case which is the most relevant for the purposes of this decision is Chief Commissioner of State Revenue v Ferrington [2004] NSWADTAP41 2004. In particular clause 42 (omitting citations and breaking its content into paragraphs) provides as follows:

First, the words “principal place of residence” should be given their ordinary meaning in the context in which they appear.

Secondly, consideration of whether a person has been residing or occupying premises as their principal place of residence is to be assessed objectively, in the light of the circumstances relating to the actual occupation of the dwelling.

Thirdly, the intention of the person concerned, gauged objectively, is relevant but not determinative of the issue.

Fourthly, to occupy a home as 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.

Fifthly, the short length of a person’s residence, while relevant, is not determinative of the issue. This is so since a recipient’s occupation of a home, while short, may have the requisite degree of permanence to it. But that will not happen if, when considered objectively, the occupation was transient, temporary, contingent or of a passing nature, or for some other purpose. One may occupy premises for a short time on a transient, temporary, or contingent basis, but one can also occupy for a short time as one's principal place of residence. It is the nature of that occupation which provides the element of permanence. The fact that a period of actual occupation is short, as in the present case, will in practice make it harder for a recipient to show that the occupation was as his or her principal place of residence, but it will not make it impossible.

38 Mr Benjamin referred the Tribunal to a number of cases to some extent relevant but distinguishable from the facts in this case. See in this context Snow v Chief Commissioner of State Revenue (No 1) [2005] NSWADT 244 and Gibson v Chief Commissioner of State Revenue [2006] NSWADT 211. In Snow the Tribunal held that the evidence pointed towards an investment motivation; clause 21 of the decision in Snow reads as follows:
These factors are far from satisfied in this case. The evidence in this case points more towards an investment motivation. The applicant moved immediately to let the property and did so for a conventional leasing period. He simply retained the option of occupying it in void periods if he happened to have returned home at such a time. It was a simple matter to move in some possessions for that purpose. His parents lived nearby and they had the vehicle to assist with such a move.
Part F. Analysis of the evidence

39 As Mr Benjamin contended, the critical date is the date of acquisition of the Property. It is clear enough that the period of occupation of the Property as a PPR during the first year after acquisition was a very short indeed.

40 Mr Benjamin did not (correctly in my view) make any point of the fact that the Applicant took occupation of a part only of the Property; the fact that this is so is not in my view relevant.

41 The evidence before the Tribunal is in some respects contradictory and it is not in all respects satisfactory. The financial aspects are difficult if not impossible to reconcile and some of the evidence as to addresses is distinctly unfavourable to the Applicant as was her failure to call Clayton, although it must be accepted that a degree of latitude should be allowed to a self- represented Applicant.

42 The section 58 documents indicate that although the Applicant's approach to her studies has been distinctly unconventional she has achieved a distinction average.

43 At the end of the day there is in fact only one critical aspect and that is as to whether the Applicant when she took occupation of the lower floor did so on the basis that it was her PPR. This in turn requires me to take a view as to whether, so far as this aspect is concerned, the Applicant is entitled to be believed. In my view and despite the contradictions, she is to be believed. She purchased the Property because she wanted to live there. That she had this firm desire emerged from her evidence. The financial circumstances were such that she had no option but to lease out a part, the fact that she obtained Clayton's help is entirely understandable although the manner in which she used his address is not in all respects comprehensible. The very fact that the Respondent did not pursue his claim as regards the duty concession is, paradoxical as this may seem, against the Respondent because it indicates an acceptance that she intended to reside in a part of the property as her PPR. This indeed was the basis upon which the Respondent did not press for the repayment of the duty concession. And she did so reside in the Property even though the period involved was extremely short. It is significant also that she did not seek a position with the Council in July 2003; an offer from the Council when it was received by her arose from the Council’s need and because one of its employees had gone overseas.

44 The Applicant must in order to succeed discharge the onus of establishing that did in fact live in the property as her PPR. The fact that she did so for so short a period is accounted for in my view by the circumstances in which the Council offered her a position which she accepted. Put in other words, I am satisfied that on the evidence before me, she would have remained in the Property and would not have gone to Coffs Harbour, at any rate in July 2003, were it not for the unsolicited offer by the Council.

45 It follows that in relation to this crucial aspect I find that the Applicant has discharged the onus and that her period of residence was, albeit very short indeed, not transient. It is relevant that the Applicant is again living in the Property; it tends to confirm that the Applicant acquired the Property in order to live in it and as her PPR. Her decidedly odd use of the Emerald Beach address as described previously in these reasons was unfortunate but not fatal.

46 The relevant section contains a discretionary power in the Respondent in respect of the period of 12 months referred to in the relevant section. That discretion was not referred to in the hearing. However it is my view that if I am wrong in my view that the Applicant did occupy the Property as her PPR within the 12 months referred to in section 12 it would be a proper exercise of the Respondent’s discretion to increase the period until the date in January 2006 when she unquestionably did so.

47 Under the Act in its present form, the Applicant would not succeed but under the Act in its previous and relevant form, she is entitled to succeed. Accordingly the decision under review is set aside and it follows that the Applicant is not obliged to refund the grant or any other moneys referable to it.