Wall v Chief Commissioner of State Revenue

[2009] NSWADT 142

CITATION:	Wall v Chief Commissioner of State Revenue [2009] NSWADT 142
DIVISION:	Revenue Division
PARTIES:	APPLICANT Jaime Vanessa Wall RESPONDENT Chief Commissioner of State Revenue
FILE NUMBER:	086055
HEARING DATES:	On the papers
SUBMISSIONS CLOSED:	29 May 2009
DATE OF DECISION:	16 June 2009
BEFORE:	Handley R - Deputy President
CATCHWORDS:	First Home Owners Grant – eligible transaction
LEGISLATION CITED:	First Home Owner Grant Act 2000 Real Property Act 1900 Duties Act 1997 State Revenue Legislation Amendment Act 2008
CASES CITED:	Chief Commissioner of State Revenue v Clapoudis [2008] NSWADTAP 7 Chief Commissioner of State Revenue v Powell [2008] NSWADT 289 Chief Commissioner of State Revenue v Aldridge & Anor [2003] NSWADTAP 50 Bates v Chief Commissioner of State Revenue [2004] NSWADT 13
REPRESENTATION:	APPLICANT C Wall, agent RESPONDENT A Gerard, solicitor
ORDERS:	The decision under review is affirmed.

1 Jaime Wall has applied to the Tribunal for the review of a decision of the Chief Commissioner of State Revenue (‘the Respondent’) to refuse her application for a First Home Owner’s Grant (‘FHO Grant’) on the ground that there was no eligible transaction under s 13 of the First Home Owner Grant Act 2000 (‘the FHOG Act’) for which a grant can be paid.

The Facts

2 On 30 June 2005, Ms Wall’s mother died. She was the registered owner of a property at Casey Crescent, Kariong, NSW (‘the property’). On 16 June 2006, probate was granted to the Public Trustee. On 22 February 2007, the Public Trustee lodged a Transmission Application with the NSW Department of Lands pursuant to s 93 of the Real Property Act 1900 seeking the registration of Ms Wall and her father, Colin Wall, as registered proprietors of the property as tenants in common in shares of 95% and 5%, respectively, consequent upon the death of Ms Wall’s mother. Stamp Duty of $10 for the stamping of the Transmission Application was paid as required by s 63 of the Duties Act 1997. Pursuant to this application, on 8 March 2007, the Registrar General issued a Certificate of Title for the property certifying the registration of Ms Wall and her father as the registered proprietors of the property as tenants in common in shares of 95% and 5% respectively.

3 On 18 October 2007, Ms Wall’s solicitors lodged an application for a FHO Grant on her behalf in respect of the property. Ms Wall’s father has previously been registered as the proprietor of a property at King Street, Umina Beach, which was acquired on 8 November 1991. By letter dated 19 November 2007, the Respondent notified Ms Wall’s solicitors that the application for a FHO Grant had been refused because her father had previously held a relevant interest in property, and because no consideration was paid for the property at Kariong. On 3 January 2008, Mr Wall wrote to the Respondent, objecting to this decision and seeking a reconsideration. On 5 January 2008, Ms Wall wrote to the Respondent in similar terms.

4 By letter dated 30 April 2008, the Respondent notified Ms Wall that he had disallowed her objection because she did not acquire her share of the property as a result of an ‘eligible transaction’. On 18 June 2008, Ms Wall wrote to the Tribunal seeking a review of this decision and, on 27 June 2008, she lodged a formal ‘Application for Review of a Decision’.

5 Ms Wall’s application was the subject of Directions Hearings on 30 July 2008, 22 October 2008 and 20 May 2009, at which directions for the filing and serving of documents were made. The parties agreed that on the filing of all submissions and other documents, the matter could be determined by the Tribunal ‘on the papers’.

The Legislation

6 The FHOG Act establishes a scheme to assist persons buying or building their first home by providing them with a grant. Pursuant to s 7, to be eligible for a grant, an applicant must satisfy the eligibility criteria contained in Division 2 of Part II of the Act, including relevantly s 11, and the purchase of the property for which the grant is sought must be an “eligible transaction”, as defined in s 13.

7 At the time of transfer of ownership of the property, ss 11, 13 and 15 stated relevantly:

11 Criterion 4 - Applicant (or applicant’s spouse) must not have had relevant interest in residential property

(1) An applicant for a first home owner grant is ineligible for the grant if the applicant or the applicant’s spouse has, before 1 July 2000, held:

(a) a relevant interest in residential property in New South Wales, or

(b) an interest in residential property in another State or a Territory that is a relevant interest under the corresponding law of that State or Territory.

13 Eligible transactions

(1) An "eligible transaction" is:

(a) a contract made on or after 1 July 2000 for the purchase of a home in New South Wales, or

(b) a comprehensive home building contract made on or after 1 July 2000 by the owner of land in New South Wales, or by a person who will on completion of the contract be the owner of land in New South Wales, to have a home built on the land, or

(c) the building of a home in New South Wales by an owner builder if the building work commences on or after 1 July 2000.

(2) A contract is a contract for the purchase of a home if the contract is a contract for the acquisition of a relevant interest in land on which a home is or is to be built under the contract by or on behalf of the vendor.

(7) The "consideration" for an eligible transaction is:

(a) in the case of a contract for the purchase of a home - the consideration for the purchase, or ...

15 All interested persons to join in application

(1) All interested persons must be applicants.

(2) An "interested person" is a person who is, or will be, on the completion of the eligible transaction to which the application relates, an owner of the relevant home ...

8 Section 18 of the FHOG Act in effect at the time provided that the amount of the FHO Grant was the lesser of either the consideration for the eligible transaction or $7,000.

9 Section 28 provides for review by the Tribunal, stating in s 28(3) that “[t]he applicant has the onus of proving the applicant’s case in an application for review”. Section 28(2) states, “The applicant’s and respondent’s cases on an application for review are not limited to the grounds of the objection.Ó

The Respondent’s Submissions

10 The Respondent’s written submissions were filed on 3 February 2009, 17 April 2009 and 29 May 2009. The Respondent submits that Ms Wall’s application fails to meet two pre-conditions for payment of the grant. First, s 7(1)(b)(i) provides that the FHO Grant is only payable in respect of an ‘eligible transaction’, defined in s 13(1)(a) in terms of a contract made for the purchase of a home, meaning a contract for the acquisition of a relevant interest in land on which a home is built (s 13(2)). Where the property is being transferred to two or more persons, both/all must be recorded as applicants for the Grant (s 15) and must be recorded on the contract for purchase.

11 The Respondent submits that it is clear from the evidence before the Tribunal that the transmission of title of the property to Ms Wall and her father was not an ‘eligible transaction’; but rather a transmission pursuant to a bequest in a will and not pursuant to a contract for the purchase of the property: Chief Commissioner of State Revenue v Clapoudis [2008] NSWADTAP 289 (‘Clapoudis’), at [30]; Chief Commissioner of State Revenue v Powell [2008] NSWADT 7 (‘Powell’), at [15] – [16].

12 Secondly, the Respondent submits that because s 15 requires all owners of the property to be applicants for the FHO Grant, and Mr Wall is ineligible under s 11 because he has previously held a relevant interest in residential property in NSW, Ms Wall is also rendered ineligible. The Respondent notes that s 15(2)(e) of the FHOG Act now states that an ‘interested person’ does not include:

(e) a person whose ownership share in the relevant home does not exceed 5% (a "small interest holder"), but only if, in a case where there is more than one small interest holder, the total ownership share of all small interest holders in the relevant home does not exceed 5%.

13 However, this provision was inserted in the FHOG Act via Sch 5[5] of the State Revenue Legislation Amendment Act 2008, with effect from 2 July 2008. Prior to that date, there was no such provision in the FHOG Act and Mr Wall, as the owner of a ‘relevant interest in land’, defined in s 5(2)(a) as including “an estate in fee simple in land”, which was the situation in the present case, was an ‘interested person’ pursuant to s 15(2), who was required under s 15(1) to be an applicant for the FHO Grant.

14 The Respondent denies that he or any of his officers provided Ms Wall or anyone acting on her behalf with misleading information as to Ms Wall’s eligibility for the FHO Grant in respect of the property, and contends there is no evidence capable of supporting any such assertion. In any event, eligibility for the FHO Grant must be determined strictly in accordance with the provisions of the Act, and no estoppel can be effective against the operation of a statute: Chief Commissioner of State Revenue v Aldridge & Anor [2003] NSWADTAP 50 (‘Aldridge’), at [33]; Bates v Chief Commissioner of State Revenue [2004] NSWADT 13 (‘Bates’), at [43]. The Respondent notes that the transfer of the property to Ms Wall and her father was conducted by the Public Trustee, as executor of Ms Wall’s mother’s estate, without consulting with Ms Wall or her father, pursuant to the bequest in Ms Wall’s mother’s will. Moreover, there is no evidence, as originally claimed by Ms Wall, that she and her mother had reached some form of agreement in relation to the transfer of the property. The Respondent submits Ms Wall has failed to discharge the onus under s 28(3) of the FHOG Act to establish that the property passed to her and her father by way of an ‘eligible transaction’.

Ms Wall’s Submissions

15 In a letter to the Tribunal dated 18 June 2009, Ms Wall said the transmission of the property to her was pursuant to an agreement she had with her mother whereby her mother agreed to transfer the property to her subject to Ms Wall agreeing to comply with certain conditions. Ms Wall agreed to the conditions and this constitutes consideration for the transfer. A legally binding contract was created.

16 Ms Wall contended that the Respondent failed to provide her with relevant information in plain English and there was nothing printed on the FHO Grant application form with any information relating to her situation.

17 Ms Wall’s father made written submissions to the Tribunal on behalf of Ms Wall dated 28 August 2008, 1 April 2009, 7 May 2009 and 11 May 2009. He said that when he contacted the Office of State Revenue (‘OSR’), at the time when he and his wife, who was suffering from terminal cancer, were discussing how best to make provision for their children when she died, no information was provided about ‘eligible transactions’ and what this meant. On explaining their situation, he was simply advised to download the forms and information sheet from the OSR’s website. The information sheet contained no information relating to deceased estates. Mr Wall has asked the OSR for a copy of the information sheet from that time, but they have failed to provide it. The information sheet would support his claim, because of the lack of any information relating to deceased estates.

18 Mr Wall said he was never advised that to arrange the transfer in the way he and his wife proposed would result in their daughter being ineligible for the FHO Grant. They relied on the information provided, never having had any experience of FHO Grants before. If he and his wife had been given the requisite information at the outset, they would have arranged things differently. Thus, these proceedings should focus on the lack of disclosure on first contact with the OSR. He noted that the OSR’s information sheet has now been changed and does provide information relating to deceased estates and eligible transactions.

19 As it was, his wife called her two children to her bedside and explained the conditions under which she would leave them a property, with Mr Wall being the owner of 5% of each property to ensure that the property “could never be mortgaged or taken away from them by some legal suit”. Mr Wall maintains this was a contract comprised by “an offer they accepted and the consideration was by way of exchange money and action”.

20 Mr Wall contends that the OSR should acknowledge their failure to disclose relevant information, and that these proceedings should be determined in favour of his daughter on the basis that this is the fair and just outcome in circumstances where had the correct information been disclosed, the transaction would have been arranged differently. He noted that members of the public rarely make a record of conversations with a Government Department. The average citizen does not request all information in hard copy. Rather, people rely on information provided on government ‘help lines’.

Consideration

21 Mr Wall states that the focus of these proceedings should be on the lack of disclosure of relevant information when he first contacted the OSR. I am not unsympathetic to Mr Wall’s evidence that he and his wife relied on the information provided by the OSR in deciding how she should best make provision for their children on her death. I accept that he was not aware that ‘eligible transactions’ under the FHO Grant scheme did not include the transfer of property from a deceased estate following a bequest. The Respondent has not provided a copy of the FHO Grant information sheet that would have been available to Mr Wall at the time he first enquired about eligibility for the Grant, which, presumably, would have been in the period immediately prior to his wife’s death on 30 June 2005.

22 I also accept as a matter of common knowledge that information sought from Government agencies is commonly provided on ‘help lines’, and that members of the public may not be aware that when information is given to them on the phone, it may be prudent to record the date, time, name of the person providing the information, and a summary of the information provided in case the giving of that information is afterwards questioned.

23 While I accept that Mr Wall may not have been aware of the detailed application of the FHO Grant scheme, the Respondent is correct in submitting that eligibility for the FHO Grant must be determined strictly in accordance with the provisions of the FHOG Act, and that no estoppel can be effective against the operation of a statute. This was clearly stated by the Appeal Panel in Aldridge at [33], and reiterated in Bates at [43].

24 The Respondent submits that Ms Wall’s application for a FHO Grant fails to meet two pre-conditions. First, there was no ‘eligible transaction’ as defined in s 13(1) because there was no contract for the purchase of a home. In my view, the Respondent is correct. The transmission of title to the property was pursuant to a bequest in Ms Wall’s mother’s will and not pursuant to a contract for the purchase of a property. I am not satisfied on the evidence that there was any contract akin to a contract for the purchase of a home. A similar conclusion was reached by the Appeal Panel in Clapoudis and by me in Powell. Thus, because there was no eligible transaction, Ms Wall’s application for a FHO Grant cannot succeed.

25 The second ground on which the Respondent submits Ms Wall’s application must fail is because s 15(1) required all owners of the property to be applicants for a FHO Grant. Again, in my view, the Respondent is correct. Mr Wall was not included as an applicant for the FHO Grant and, indeed, he was ineligible under s 11(1)(a) because he had previously purchased a property in Umina Beach. I note that the FHOG Act was subsequently changed to include s 15(2)(e), allowing for ‘small interest holders’, not exceeding a 5% share in the relevant home. However, this provision was not in effect at the relevant time and does not therefore apply in this case.

Decision

26 In conclusion, I am satisfied that despite what Mr Wall sees an injustice, the Respondent correctly applied the law in this case and the decision under review must therefore be affirmed.