Valencia v Chief Commissioner of State Revenue

[2009] NSWADT 129

CITATION:	Valencia v Chief Commissioner of State Revenue [2009] NSWADT 129
DIVISION:	Revenue Division
PARTIES:	APPLICANT Ricardo Valencia
FILE NUMBER:	076152
HEARING DATES:	17 September 2008, 20, 27 October 2008, 10,23 December 2008, 26 May 2009
SUBMISSIONS CLOSED:	28 May 2009
DATE OF DECISION:	29 May 2009
BEFORE:	Perrignon R - Judicial Member
CATCHWORDS:	First Home Owner Grant,First Home Plus,Stamp Duty,Jurisdiction,Objection
LEGISLATION CITED:	Duties Act 1997 First Home Owner Grant Act 2000 Taxation Administration Act 1996
CASES CITED:	Chief Commissioner of State Revenue v Paspaley [2008] NSWCA 184.
REPRESENTATION:	APPLICANT Ricardo Valencia RESPONDENT Chief Commissioner of State Revenue
ORDERS:	As the Tribunal has determined that it lacks jurisdiction to review the decisions the subject of the Application, the Application is dismissed.

1 In 2006, the Applicant, Mr. Valencia, purchased a home unit at Hillsdale in Sydney.

2 He applied for, and was granted, both the First Home Owner Grant of $7,000, and exemption from stamp duty under the ‘First Home Plus’ scheme.

3 It was a condition of the First Home Owner Grant, and of the ‘First Home Plus’ stamp duty exemption, that Mr. Valencia occupy the home unit as his principal place of residence for a continuous period of at least six months, commencing no more than twelve months after “completion”, as that term was defined in each of the First Home Owner Grant Act 2000 and Duties Act 1997.

4 By 11 September 2007, Mr. Valencia had not commenced to occupy the unit as his principal place of residence. By letter of that date, he asked the Chief Commissioner to extend time for him to satisfy the residency requirement.

5 On 27 September 2007, the Chief Commissioner declined to extend time, in exercise of his discretions under section 12(3) of the First Home Owner Grant Act 2000 and section 76 of the Duties Act 1997. By letter of that date, he advised Mr. Valencia that he must either commence occupation by 29 September, or repay the grant, and pay his stamp duty.

6 On 11 October 2007, Mr. Valencia lodged an objection to the decision or decisions of 27 September 2007. That objection was disallowed by the Chief Commissioner on 24 October 2007.

7 On 9 November 2007, the Chief Commissioner, exercising his power under section 23 of the First Home Owner Grant Act 2000, reversed his decision to authorise the First Home Owner Grant. He reassessed Mr. Valencia to stamp duty, and imposed interest. The Chief Commissioner required repayment of the grant under section 45 of the First Home Owner Grant Act 2000, and payment of the duty.

8 For reasons which are not before the Tribunal, no objection to the decisions of 9 November 2007 was ever lodged.

9 Mr. Valencia seeks review by the Tribunal of the decisions made on 27 September 2007 and 9 November 2007.

Objections to jurisdiction

10 The Chief Commissioner submits that the Tribunal lacks jurisdiction to review any of these decisions, on the following grounds.

a. In relation to the decision made on 27 September 2007 under section 12 of the First Home Owner Grant Act 2000, Mr. Valencia’s objection of 11 October 2007 was invalid, because no right of objection to this class of decision is provided by section 25(1) of the First Home Owner Grant Act 2000.

b. In relation to the decision made on 27 September 2007 under section 76 of the Duties Act 1997, Mr. Valencia failed to object at all, because his objection of 11 October 2007 was expressed to relate only to the decision made under the First Home Owner Grant Act 2000.

c. In the alternative, should the Tribunal find that Mr. Valencia did object to the decision made on 27 September 2007 under section 76 of the Duties Act 1997, with the result that his objection was not determined within 90 days, Mr. Valencia failed to give 14 days written notice of his intention to seek review, as required by section 100(1) of the Taxation Administration Act 1996.

d. In relation to the decisions made on 9 November 2007 under the First Home Owner Grant Act 2000, Mr. Valencia failed to lodge an objection as required by section 28(1) of that Act.

e. In relation to the decision made on 9 November 2007 to reassess Mr. Valencia to stamp duty with interest, Mr. Valencia failed to lodge an objection as required by section 96(1) of the Taxation Administration Act 1996.

11 Should the Tribunal accept the Chief Commissioner’s submissions on jurisdiction, Mr. Valencia submits that section 55(3) of the Administrative Decisions Tribunal Act 1997 supplies the want of jurisdiction, because it is necessary for the protection of Mr. Valencia’s interests, and the proceedings were commenced within a reasonable time.

12 In reply, the Chief Commissioner submits that section 55(3) does not have that effect.

13 By his counsel, the Chief Commissioner further submits that, if Mr. Valencia should seek the Commissioner’s permission to lodge objections to the decisions of 9 November 2007 out of time, with a written explanation for delay, the Chief Commissioner will be empowered to give proper consideration to the request. Though he is not in a position to predict the outcome, he has indicated that he would welcome formal adjudication by the Tribunal of the substantive issues in dispute, if the parties acted in such a way that the Tribunal was properly empowered to make such an adjudication.

14 In any event, as the Court of Appeal observed in Chief Commissioner of State Revenue v Paspaley [2008] NSWCA 184, a refusal to permit an objection to be lodged out of time under the Taxation Administration Act 1996 is a decision “under a taxation law”, to which a further objection may be lodged under section 86 of the Taxation Administration Act 1996. Disallowance of such a further objection would attract the review powers of the Tribunal.

Issues for determination

15 Before reviewing any of the decisions of 27 September 2007 or 9 November 2007, the Tribunal must determine whether it enjoys jurisdiction to do so.

16 As the want of any right to lodge an objection to the decision made on 27 September 2007 under the First Home Owner Grant Act 2000 was not raised until the end of the proceedings, the Tribunal has had the advantage of receiving both submissions on jurisdiction and evidence on the substantive issues.

Legislation – Tribunal’s powers of review

17 The Tribunal’s power to review decisions of the Chief Commissioner made under the First Home Owner Grant Act 2000 derives from section 28(1) of that Act, which provides as follows:

“(1) An objector may apply to the Administrative Decisions Tribunal for a review of the decision (the original decision) to which the objection was made if:

(a) the objector is dissatisfied with the Chief Commissioner’s determination of the objection, or

(b) 90 days have passed since the objection was lodged with the Chief Commissioner and the Chief Commissioner has not determined the objection.”

18 The right to lodge an objection is governed by Section 25(1) of the Act. As at 11 October 2007, that section provided:

“(1) An applicant (or former applicant) for a first home owner grant who is dissatisfied with any of the following decisions of the Chief Commissioner may lodge a written objection to the decision with the Chief Commissioner:
(a) a decision on the person’s application for a first home owner grant (including a decision to vary or reverse an earlier decision made independently of an objection under this Act),

(b) a decision to require the person to repay an amount under section 45,

(c) a decision to require the person to pay a penalty under section 45.”

19 The Tribunal’s power to review decisions of the Chief Commissioner made under the Duties Act 1997 derives from section 96(1) of the Taxation Administration Act 1996, which provides similarly as follows:

“(1) A taxpayer may apply to the Administrative Decisions Tribunal for a review of a decision of the Chief Commissioner that has been the subject of an objection under Division 1 if:

(a) the taxpayer is dissatisfied with the Chief Commissioner’s determination of the taxpayer’s objection, or

(b) 90 days (not including any period of suspension under section 92) have passed since the taxpayer’s objection was served on the Chief Commissioner and the Chief Commissioner has not determined the objection.”

20 Section 100(1) of the Taxation Administration Act 1996 provides:

“(1) An application for review following a failure of the Chief Commissioner to determine an objection cannot be made unless the applicant has given written notice of the proposed application to the Chief Commissioner not less than 14 days before it is made.”

21 Section 96 of the latter Act permits a taxpayer to object to reassessments made by the Chief Commissioner, and to any decision made by him under a ‘taxation law’, which is defined to include the Duties Act 1997. There is no issue in these proceedings that the Chief Commissioner’s decision of 27 September 2007 to reassess Mr. Valencia to stamp duty was one to which objection could be taken under section 96.

Decisions of 27 September 2007 – First Home Owner Grant

22 On 11 October 2007, Mr. Valencia lodged an objection to the decision or decisions of 27 September 2007. The Chief Commissioner disallowed the objection, so far as it related to his decision to decline to extend time for compliance with the residency requirement of the First Home Owner Grant.

23 The Tribunal’s jurisdiction is enlivened by section 28(1) of the First Home Owner Grant Act 2000 only where an objector exercises a right to make an objection, and the objection is either disallowed or not determined within 90 days.

24 Subsection 25(1) does not expressly empower a person to object to a decision under section 12 of the Act, being a decision to vary, or decline to vary, time for compliance with the residency requirement. Such a decision might generally be described as one in relation to the First Home Owner Grant, but for the reasons which follow it cannot properly be described as a decision “on the person’s application for a first home owner grant”, as required by section 25(1)(a).

25 The powers of the Chief Commissioner to determine ‘an application for a first home owner grant’ are set forth in Part 2 Division 5 of the Act. The Chief Commissioner must authorise payment of the grant if satisfied that it is payable: section 17. He may do so in anticipation of the residence requirement being satisfied, if satisfied that the applicant intends to comply with the residence requirement, either during the statutory period, or such longer period as the Chief Commissioner may allow: section 20.

26 In this case, the Chief Commissioner authorised payment of the grant under section 17 in anticipation of the residence requirement being satisfied, having satisfied himself under section 20 that Mr. Valencia intended to satisfy it. The Chief Commissioner did not also decide to impose a residence requirement. That was a statutory condition imposed by section 12 of the Act.

27 On 27 September 2007, the Chief Commissioner declined to vary time for compliance with the residency requirement. In doing so, he made a determination under section 12 of the Act. He did not vary or reverse his earlier decision on Mr. Valencia’s application for the First Home Owner Grant, as envisaged by the words in parentheses in section 25(1)(a).

28 Similarly, the decision of 27 September 2007 did not amount to a requirement that Mr. Valencia repay an amount or pay a penalty under section 45, as envisaged by paragraphs 25(1)(c) and (d). No such decision was made until 9 November 2007.

29 It follows:

f. that section 25 did not entitle Mr. Valencia to object to the Chief Commissioner’s decision made on 27 September 2007 under section 12 of the First Home Owner Grant Act 2000;

g. that the Chief Commissioner lacked power to determine any such objection; and

h. that section 28 of the Act does not empower the Tribunal to review the Chief Commissioner’s decision.

Decisions of 27 September 2007 – First Home Plus exemption

30 In objecting to the decision or decisions of 27 September 2007, Mr. Valencia used a standard form published by the Chief Commissioner. In that form, Mr. Valencia identified the decisions to which he was objecting in three ways. First, he quoted the reference number which the Chief Commissioner had used in his letter of 27 September 2007. Secondly, he indicated that his objection was made within 60 days of the date of the relevant decision or decisions. Thirdly, he wrote the following words, among others, under the heading “Grounds for objection”:

“I am really hoping on [sic] moving [sic] soon to my new home and I hope & look forward to you granting me this request for an extension.

Also the letter was issued on 27/09/07 stating I must take up residence by the 29/09/07 However I did not even receive the letter until the 05/10/07. How was I supposed to move in on the 29/09/07 when the tenants are still in occupance [sic] of the residents [sic]. Please help me by granting my request for an extension.”

31 In doing so, Mr. Valencia made it plain that he sought the very extensions of time which had been denied him on 27 September 2007.

32 However, the standard form invited him also to tick a box or boxes, indicating whether the decision to which he was objecting was one in relation to the First Home Owner Grant, stamp duty, or some other matter. Had Mr. Valencia declined to tick any of the boxes which appeared on the Chief Commissioner’s standard form objection, it would have been clear that he sought the same extensions of time which had been denied him by letter dated 27 September 2007 – that is, extensions of time under both section 12 of the First Home Owner Grant Act 2000 and section 76 of the Duties Act 1997. In that event, he would simply have failed to categorise the decisions in a legal sense.

33 However, Mr. Valencia accepted the invitation on the form to tick a box. He ticked the box entitled “First Home Owner Grant”. He did not tick the box entitled “Stamp Duty/Duties”. The Tribunal accepts Mr. Valencia’s unchallenged evidence that he ticked only one box, because he thought that the First Home Owner Grant covered both the grant and the stamp duty exemption.

34 Mr. Valencia’s education has been limited. He left school at about 16 years of age, after completing his School Certificate. He gave evidence that he only just managed to pass. For some years before this, he had been in a special education class at high school. Apart from a course in the responsible service of alcohol, he has had no formal vocational training. The manner in which he answered questions and gave evidence generally before the Tribunal was consistent with an inference that his learning difficulties, at least to some extent, are ongoing. The Tribunal draws that inference.

35 Mr. Valencia has no training in the law, let alone the law of taxation. In all the circumstances, his failure to appreciate that the grant and the stamp duty exemption derived from different statutes, or that he needed to tick a second box, is understandable.

36 As a consequence of his failure to tick the right box, the Chief Commissioner’s staff interpreted the objection as relating only to the First Home Owner Grant, and not to the ‘First Home Plus’ exemption. For that reason, no consideration was given to any objection to the decision made under the Duties Act 1997.

37 By his counsel, Mr. Valencia submits that the Tribunal should draw a different conclusion, having regard to the documentary evidence and the conduct of the Chief Commissioner up to trial. That submission must be rejected. The deliberations of the Chief Commissioner’s staff are recorded in writing, which is in evidence. The Tribunal finds that the Chief Commissioner did not interpret the objection as relating to the ‘First Home Plus’ exemption.

38 An internal review was conducted of the decision to decline to extend time, but only in respect of the First Home Owner Grant. Thus, the Commissioner submits, he was deprived of the opportunity to reconsider his decision of 27 September 2007 made under the Duties Act 1997.

39 To give the Chief Commissioner that opportunity, the Tribunal remitted the decisions of 27 September 2007 to him for reconsideration under section 65 of the Administrative Decisions Tribunal Act 1997. The Tribunal is informed and accepts that the Chief Commissioner reconsidered his decision, and affirmed it. The Chief Commissioner does not submit that he has suffered any prejudice by reason of his not having had an opportunity to reconsider the decision earlier.

40 It remains to construe the terms of the objection lodged by Mr. Valencia on 11 October 2007.

41 Looking at the grounds alone, it was plain that Mr. Valencia sought the very extensions which he had originally sought in his letter of 11 September 2007, and which had been declined on 27 September 2007. That is, an extension of time in relation to each of the First Home Owner Grant and the ‘First Home Plus’ exemption. The Tribunal accepts that this was Mr. Valencia’s intention.

42 The objection might be construed objectively in the way the Chief Commissioner did, if Mr. Valencia’s failure to tick the box entitled “Stamp Duty/Duties” amounted to a clear statement or admission that no objection was taken to the decision of 27 September 2007, so far as it related to the First Home Plus exemption.

43 No such statement or admission was intended by Mr. Valencia. On the contrary, he intended to object to the entirety of the decision or decisions notified by letter dated 27 September 2007. What he did, in ticking one box only, was to make an error in the legal characterisation of those decisions, due to inadvertence or ignorance of the law. The language in which the grounds were couched supported such an interpretation.

44 To that extent, the objection was capable of being construed objectively as one relating to all the decisions of 27 September 2007. The Tribunal so interprets it.

45 For those reasons, the Tribunal finds that objection was taken to the decision made on 27 September 2007 under section 76 of the Duties Act 1997, as required by section 100(1) of the Taxation Administration Act 1996.

46 To the extent that it related to that decision, the objection was not determined by the Chief Commissioner within 90 days. This gave Mr. Valencia a right to seek review by the Tribunal, on giving 14 days written notice to the Chief Commissioner. He did not do so before commencing these proceedings. In those circumstances, the Tribunal presently lacks jurisdiction to proceed to a review.

47 Section 57 of the Administrative Decisions Tribunal Act 1997 empowers the Tribunal to extend time for commencement of proceedings for review, if the Tribunal is of the opinion that the person has provided a reasonable explanation for the delay in making the application. Whether Mr. Valencia wishes to make such an application after giving 14 days written notice of his intention to proceed, and whether there is any utility in such a course if the Commissioner accepts late lodgement of objections to the decisions of 9 November 2007, is a matter for Mr. Valencia in consultation with his legal advisers.

Decisions of 9 November 2007 – stamp duty

48 The Tribunal’s power to review decisions made under a ‘taxation law’, as defined in the Taxation Administration Act 1996, is confined to decisions which may be, and have been, the subject of objection by the taxpayer under Division 1 of that Act: Chief Commissioner of State Revenue v Paspaley [2008] NSWCA 184.

49 No objection has been lodged to the decision made on 9 November 2007 to reassess Mr. Valencia to stamp duty. That decision was made under a ‘taxation law’ as defined. It follows that the Tribunal lacks jurisdiction to review it.

Decisions of 9 November 2007 – First Home Owner Grant

50 Similarly, the Tribunal’s power under section 28(1) of the First Home Owner Grant Act 2000 to review decisions to reverse the First Home Owner Grant or require its repayment is enlivened only where a valid objection is made under section 25 of that Act, and is either disallowed or not determined for 90 days.

51 No objection has been lodged to the decisions made on 9 November 2007 under that Act. It follows that the Tribunal lacks jurisdiction to review them.

Section 55, Administrative Decisions Tribunal Act 1997

52 It remains to consider Mr. Valencia’s submissions on the effect of section 55(3) of the Administrative Decisions Tribunal Act 1997.

53 Subsection 55(1) relevantly provides:

“(1) A person may apply to the Tribunal for a review of a reviewable decision only if:
(a) the application is made by an interested person, and

(b) where the person was entitled to seek an internal review of the decision—the person has duly applied for such a review and the review is taken to have been finalised under section 53(9), and

(c) the application is made in the manner prescribed by the rules of the Tribunal, and

(d) the application is made within the period or by the time prescribed by or under the enactment under which the application is made or, if no such period or time is prescribed, the default application period for the decision.”

54 Subsection 55(3) provides:

(3) “Despite subsections (1) (b) and (d) and (2), the Tribunal may deal with an application for the review of a reviewable decision even though the applicant has not duly applied for an internal review to which the applicant was entitled if the Tribunal is satisfied that:

(a) the applicant made a late application for the internal review in circumstances where the person dealing with the application unreasonably refused to consider the application and the application to the Tribunal was made within a reasonable time following the reviewable decision of the administrator concerned, or

(b) it is necessary for the Tribunal to deal with the application in order to protect the applicant’s interests and the application to the Tribunal was made within a reasonable time following the reviewable decision of the administrator concerned.”

55 Section 38(1) of the Act further provides:

“(1) The Tribunal has jurisdiction under an enactment to review a decision (or a class of decisions) if the enactment provides that applications may be made to it for a review of any such decision (or class of decisions) made by an administrator:

(c) in the exercise of functions conferred or imposed by or under the enactment, or

(d) in the exercise of any other functions of the administrator identified by the enactment.”

56 By his counsel, Mr. Valencia relies on subsection 96(4) of the Taxation Administration Act 1996, which provides that sections 55(1)(b) and (d) of the Administrative Decisions Tribunal Act 1996:

“do not apply to an application [for review by the Tribunal] made under this section (or any assessment or other decision to which it relates)”.

57 He submits that subsection 96(4) overcomes his failure to seek an internal review of the decisions of 9 November 2007, because it removes the requirement to do so under section 55(1)(b).

58 Properly construed, subsection 55(1) restricts the rights of persons to apply to the Tribunal to those cases where the requirements of the section are satisfied. It does not confer a right to apply for review of a decision made under another enactment simply because those requirements are satisfied. When read together with the definition of “reviewable decision”, section 38(1) makes it plain that rights of review are conferred by other enactments – in this case, section 28 of the First Home Owner Grant Act 2000 and section 96 of the Taxation Administration Act 1996.

59 Subsection 55(3) merely moderates the restrictive effect of subsection (1) in certain circumstances. Where, as here, no right of review is conferred by another enactment, section 55(3) does not operate to supply the deficiency.

60 The removal of the restriction under section 55(1)(b) in relation to applications for review of stamp duty assessments is appropriate, because the requirement to seek internal review is supplied by section 96(1) of the Taxation Administration Act 1996. Unless that requirement is satisfied, there can be no external review: Paspaley.

61 Section 103A of the Taxation Administration Act 1996 also operates to exclude the jurisdiction of any court of tribunal “to consider any question concerning an assessment or other decision of the Chief Commissioner under a taxation law (including the determination of an objection under Division 1) except as provided by this Part.”

62 In any event, section 55(3) could have no application to the decisions made on 27 September 2007, because the Tribunal has found that Mr. Valencia duly applied for an internal review of those decisions.

63 It follows that no right of review is provided by section 55 of the Administrative Decisions Tribunal Act 1997 in respect of any of the Chief Commissioner’s decisions made on 27 September 2007 or 9 November 2007.

Conclusion

64 For the reasons given, the Tribunal does not presently have jurisdiction to review any of the decisions made on 27 September 2007 and 9 November 2007.

Order

65 The Tribunal makes the following order:

As the Tribunal has determined that it lacks jurisdiction to review the decisions the subject of the Application, the Application is dismissed.