Wang v Chief Commissioner of State Revenue

[2021] NSWCATAD 45

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Wang v Chief Commissioner of State Revenue [2021] NSWCATAD 45

Hearing dates:

19 February 2021

Date of orders:

2 March 2021

Decision date:

02 March 2021

Jurisdiction:

Administrative and Equal Opportunity Division

Before:

S Goodman SC, Senior Member

Decision:

The decisions of the respondent under review are affirmed.

Catchwords:

ADMINSTRATIVE LAW – First Home Owner Grant – reversal of decision to authorise payment of grant – decision to require repayment – penalty – whether residence requirement met

Legislation Cited:

Administrative Decisions Review Act 1997

First Home Owner Grant (New Homes) Act 2000

Taxation Administration Act 1996

Cases Cited:

Briginshaw v Briginshaw (1938) 60 CLR 336

Chief Commissioner of State Revenue v Ferrington (GD) [2004] NSWADTAP 41

Cornish Investments Pty Ltd v Chief Commissioner of State Revenue (RD) [2013] NSWADTAP 25

Deverich v Chief Commissioner of State Revenue [2010] NSWADT 268

Elskaf v Chief Commissioner of State Revenue (GD) [2006] NSWADTAP 10

Khalil v Chief Commissioner of State Revenue [2011] NSWADT 276

Knight v Chief Commissioner of State Revenue [2008] NSWADT 83

Laurence and Marion v Chief Commissioner of State Revenue [2020] NSWCATAD 93

Levitch Designs Associates Pty Ltd atf Levco Unit Trust v Chief Commissioner of State Revenue [2014] NSWCATAD 215

Taylor v Chief Commissioner of State Revenue [2004] NSWADT 36

Wang v Chief Commissioner of State Revenue [2016] NSWCATAD 61

Texts Cited:

Nil

Category:

Principal judgment

Parties:

Qiao Wang (Applicant)
Chief Commissioner of State Revenue (Respondent)

Representation:

Counsel:
O Berkmann (Respondent)

Solicitors:
Applicant (Self-Represented)
Crown Solicitor (Respondent)

File Number(s):

2020/00248838

Publication restriction:

Nil

REASONS FOR DECISION

Introduction

1. In June 2015, the applicant applied for and received a grant made under the First Home Owner Grant (New Homes) Act 2000 (FHOG Act) with respect to a property at Turrella (Turrella Property).

2. The grant was conditional upon the applicant meeting the eligibility criterion in s 12 of the FHOG Act. That criterion is referred to in s 12, and in these Reasons, as the residence requirement.

3. In November 2019, the respondent decided to reverse the respondent’s earlier decision to authorise payment of the grant (first decision); to require the applicant to repay the amount of the grant (second decision); and to require the applicant to pay a penalty (third decision). Those decisions were made under ss 23 and 45 of the FHOG Act.

4. The applicant lodged an objection to those decisions as he was entitled to do under s 25 of the FHOG Act. Following the respondent’s disallowance of the objection, the applicant has applied to the Tribunal for administrative review.

5. The central issue for determination by the Tribunal is whether the applicant met the residence requirement with respect to the Turrella Property. This requires the applicant to satisfy the Tribunal that the applicant occupied the Turrella Property as his principal place of residence for a continuous period of six months starting within 12 months of the completion of the agreement to purchase the Turrella Property.

6. For the reasons developed below, the Tribunal is not satisfied that the applicant met the residence requirement. It follows that the first and second decisions should be affirmed. The Tribunal is also satisfied that the third decision, to require the applicant to pay a penalty, should be affirmed.

Jurisdiction and the Tribunal’s task

7. As the applicant has objected to the respondent’s decisions and the respondent has disallowed the objection, the Tribunal has jurisdiction to review the decisions, pursuant to s 28(1) of the FHOG Act and s 9 of the Administrative Decisions Review Act 1997 (ADR Act).

8. In conducting that review, the Tribunal is required to determine the correct and preferable decision having regard to the materials before it and the applicable law and may affirm, vary or set aside the decisions (and if a decision is set aside, make another decision in substitution): s 63 ADR Act. The Tribunal also has power under s 29 of the FHOG Act to confirm, vary or reverse the original decision, and may make any further order as to costs or otherwise as it thinks fit.

9. The material before the Tribunal comprises:

1. the application form dated 4 June 2015 submitted by the applicant when he applied for the grant;

2. a statutory declaration by the applicant dated 18 May 2019 and accompanying AGL electricity accounts, Energy Australia gas accounts and a TPG account statement;

3. a bundle of documents lodged by the respondent with the Tribunal under s 58 of the ADR Act;

4. an affidavit of Mr Ghanem, a solicitor in the employ of the Crown Solicitor’s office, affirmed on 17 November 2020;

5. written submissions from the respondent;

6. oral submissions from the applicant and the respondent.

Legislation

10. The following provisions of the FHOG Act are germane to the determination of the issues in these proceedings:

7 Entitlement to grant

(1)   A first home owner grant is payable on an application under this Act if:

(a)   the applicant or, if there are 2 or more of them, each of the applicants complies with the eligibility criteria, and

(b)   the transaction for which the grant is sought:

(i)   is an eligible transaction, and

(ii)   has been completed, and

(c)   the total value of the transaction does not exceed the eligibility cap for the type of first home owner grant that is available in respect of that transaction.

...

12   Criterion 5—Residence requirement

(1)   An applicant for a first home owner grant must:

(a)   commence occupation of the home to which the application relates as the applicant’s principal place of residence within 12 months after completion of the eligible transaction or the period approved by the Chief Commissioner under this section, and

(b)   occupy the home as a principal place of residence for a continuous period of at least 6 months or the period approved by the Chief Commissioner under this section.

...

17 Chief Commissioner to decide applications

(1)   If the Chief Commissioner is satisfied that a first home owner grant is payable on an application, the Chief Commissioner must authorise the payment of the grant.

(2)   Payment of a first home owner grant may be authorised under section 20 before completion of the relevant eligible transaction or in anticipation of compliance with the residence requirement.

(emphasis added)

20   Payment in advance, subject to statutory conditions

(1)   The Chief Commissioner may authorise payment of a first home owner grant:

(a)   before completion of the relevant eligible transaction, if the Chief Commissioner is satisfied that it is appropriate to do so in particular circumstances, or

(b)   in anticipation of compliance with the residence requirement, if the Chief Commissioner is satisfied that each applicant who is required to comply, but has not yet complied, with the residence requirement, intends to occupy the home as his or her principal place of residence for a continuous period of at least 6 months commencing within 12 months after completion of the eligible transaction or a longer period allowed by the Chief Commissioner, or both.

(1)   If a first home owner grant is paid in anticipation of compliance with the residence requirement, the payment is made on condition that, if the residence requirement is not complied with, the applicant must within 14 days after the end of the period allowed for compliance:

(a)   give written notice of that fact to the Chief Commissioner, and

(b)   repay the amount of the grant.

(2)   A person who fails to comply with the condition prescribed by this section is guilty of an offence.

(emphasis added)

23   Power to correct decision

(1)   If the Chief Commissioner decides an application, and is later satisfied (independently of an objection under this Act) that the decision is incorrect, the Chief Commissioner may vary or reverse the decision.

(2)   A decision cannot be varied or reversed under this section more than 5 years after it was made.

(3)   The 5-year time limit on varying or reversing a decision does not apply to a decision that was made on the basis of false or misleading information provided by an applicant for a first home owner grant, or by a person on behalf of the applicant.

...

25 Objections

(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.

28 Administrative reviews by Civil and Administrative Tribunal

(1)   An objector may apply to the Civil and Administrative Tribunal for an administrative review under the Administrative Decisions Review Act 1997 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.

(2)   The applicant’s and respondent’s cases on an application for an administrative review are not limited to the grounds of the objection.

(3)   The applicant has the onus of proving the applicant’s case in an application for an administrative review.

...

29 Powers of Civil and Administrative Tribunal on administrative review

(1)   On an administrative review, the Civil and Administrative Tribunal may:

(a)   confirm, vary or reverse the original decision, and

(b)   make any further orders as to costs or otherwise as it thinks fit.

(2) Subsection (1) does not limit the generality of Division 3 of Part 3 of Chapter 3 of the Administrative Decisions Review Act 1997.

45   Power to require repayment and impose penalty

(1)   The Chief Commissioner may, by written notice, require an applicant (or former applicant) for a first home owner grant to repay an amount paid on the application if:

(a)   the amount was paid in error, or

(b)   the Chief Commissioner reverses the decision under which the amount was paid for any other reason.

(2)   If, as a result of an applicant’s dishonesty, an amount is paid by way of a first home owner grant, the Chief Commissioner may, by the notice in which repayment is required or a separate notice, impose a penalty not exceeding the amount the applicant is required to repay.

(3)   If an applicant (or former applicant) for a first home owner grant fails to make a repayment required under this section or the conditions of the grant, the Chief Commissioner may, by written notice, impose a penalty not exceeding the amount the applicant is required to repay.

...

(emphasis added)

Factual Background

11. Set out below is a chronological account of relevant events.

12. On 4 April 2013, according to data held by the NSW Electoral Commission (Electoral Commission), the applicant recorded his address as a property at Riverwood.

13. On 2 July 2014, according to the records of Transport for NSW, the applicant changed his address from an address in Granville to an address in Epping (Epping Property). The Epping Property is the applicant’s parent’s address. The Transport for NSW records indicate nine notifications of change of address by the applicant between May 2004 and October 2013, but no change to the applicant’s address with that body after 2 July 2014.

14. On 30 July 2014, according to data held by the Electoral Commission, the applicant recorded his address as the Epping Property.

15. On 30 December 2014, the applicant’s purchase of the Turrella Property was completed. It was transferred to him with vacant possession.

16. 19 January 2015, according to the records of AGL, was the “connection date” for the applicant at the Turrella Property.

17. On 23 January 2015, Sydney Water’s records concerning the Turrella Property were updated to record a change of ownership, with the applicant as the new owner and his mailing address as the Epping Property. The Epping Property remained the applicant’s mailing address with Sydney Water with respect to the Turrella Property until it was changed by the applicant on 26 July 2018.

18. On 27 January 2015, the applicant made a cash deposit at Macquarie Centre.

19. On 12 February 2015, according to the records of Transport for NSW, a Ms Fatema notified that body of a change of address with her new address being the Turrella Property. The Transport for NSW records indicate that Ms Fatema’s address remained as the Turrella Property until 9 January 2017, when it was changed to a different address.

20. On 28 February and 31 March 2015, the applicant made cash and cheque deposits at an automatic teller machine at Epping.

21. After 9 April 2015, Energy Australia sent a gas account addressed to the applicant at the Turrella Property for the period 7 January 2015 to 9 April 2015.

22. On 14 April 2015, the applicant made a withdrawal from an automatic teller machine at Eastwood.

23. After 23 April 2015, AGL sent an electricity account addressed to the applicant at the Turrella Property, for the period from 19 January 2015 to 23 April 2015.

24. On 16 May 2015, the applicant made a withdrawal from an automatic teller machine at Eastwood.

25. On 31 May 2015, the applicant made a withdrawal from an automatic teller machine at Eastwood.

26. On 4 June 2015, the applicant lodged an application for a grant with respect to the Turrella Property. In that application, the applicant indicated that:

1. he was the only person with a relevant interest in the Turrella Property;

2. his current residential address was the Turrella Property;

3. the date of occupancy of the Turrella Property was 8 January 2015;

4. his postal address was the Epping Property;

5. he did not have a partner or spouse.

27. On 7 June 2015, the applicant made a withdrawal from an automatic teller machine at Eastwood.

28. Also on 7 June 2015, according to the records of the Electoral Commission, Ms Fatema enrolled with the Electoral Commission, using the Turrella Property as her address.

29. On 10 June 2015, the applicant made a cash deposit at an automatic teller machine at Epping.

30. On 13 June 2015, the applicant made a withdrawal from an automatic teller machine at Epping.

31. On 25 June 2015, the respondent paid the grant of $15,000 to the applicant.

32. On 27 June and 4 July 2015, the applicant made withdrawals from an automatic teller machine at Eastwood.

33. After 7 July 2015, Energy Australia sent a gas account addressed to the applicant at the Turrella Property, for the period 10 April to 7 July 2015.

34. On 13 and 20 July 2015, the applicant made withdrawals from a branch of the Commonwealth Bank at the Macquarie Centre.

35. On 19 July 2015, a TPG statement of account was printed. It was addressed to the applicant at the Turrella Property and covered the period 8 January to 30 June 2015.

36. After 21 July 2015, AGL sent an electricity account addressed to the applicant at the Turrella Property, for the period 24 April 2015 to 21 July 2015.

37. 31 August 2015, according to the records of AGL, was the “disconnection date” for the applicant at the Turrella Property. After 31 August 2015, AGL sent an electricity account addressed to the applicant at the Turrella Property for the period 22 July 2015 to 31 August 2015.

38. 1 September 2015, according to the records of AGL, was the “connection date” for Ms Fatema at the Turrella Property.

39. On 4 September 2015, the Australian Taxation Office (ATO) received the applicant’s 2015 Individual Tax Return (which it may be inferred was for the year ended 30 June 2015). That return recorded the applicant’s home address as the Epping Property.

40. On 6 October 2015, Sydney Water sent a water account for the Turrella Property to the applicant at the Epping Property.

41. After 21 October 2015, AGL sent an electricity account addressed to Ms Fatema at the Turrella Property for the period 1 September 2015 to 21 October 2015.

42. After 19 January 2016, AGL sent an electricity account to Ms Fatema at the Turrella Property, for the period 22 October 2015 to 19 January 2016.

43. On 7 February 2016, according to data held the Electoral Commission, the applicant enrolled with the Electoral Commission with his address being the Epping Property.

44. After 19 April 2016, AGL sent an electricity account to Ms Fatema at the Turrella Property for the period 20 January 2016 to 19 April 2016.

45. 19 May 2016, according to the records of AGL, was the “disconnection date” for Ms Fatema at the Turrella Property. After 19 May 2016, AGL sent an electricity account for the Turrella Property to Ms Fatema for the period 20 April to 19 May 2016. The account was addressed to her at a different address.

46. On 27 October 2016, the ATO received the applicant’s 2016 taxation return. That return recorded the applicant’s home address as the Epping Property and that the Turrella Property first earned rental income on 1 August 2015.

47. On 6 May 2019, the respondent wrote to the applicant, giving him notice of an investigation into whether he had met the residence requirement. The respondent asked the applicant to provide to the respondent a completed statutory declaration and documentary evidence from at least three sources which proved that the applicant met the residence requirement.

48. On or about 18 May 2019, the applicant lodged a statutory declaration of that date with the respondent. In that statutory declaration the respondent declared that he:

1. occupied the Turrella Property for the period from 1 January 2015 until 12 July 2015;

2. did not reside in the Turrella Property with any third party under a lease, licence or arrangement at any time.

49. The applicant also provided to the respondent copies of:

1. the AGL accounts addressed to the applicant at the Turrella Property for the periods 19 January 2015 to 23 April 2015 and 24 April 2015 to 21 July 2015;

2. the Energy Australia gas accounts addressed to the applicant at the Turrella Property for the periods 7 January 2015 to 9 April 2015 and 10 April 2015 to 7 July 2015;

3. the TPG statement of account addressed to the applicant at the Turrella Property for the period 8 January 2015 to 30 June 2015.

50. On 2 August 2019, there was a telephone conversation between Ms Rezk of the respondent and the applicant. Ms Rezk’s note of that conversation, made in the respondent’s electronic record keeping system, is as follows:

I rang Mr Wang to discuss the compliance investigation. He said he lived in the property by himself not with a third party. He said he lived there only to meet the residency requirement.

I asked who was his employer at the time, he said Ebet Group, who have change (sic) their name to TABCORP.

...

51. Also on 27 November 2019, Ms Rezk spoke again with the applicant. Her record of that conversation is as follows:

Today I called Mr Wang. I explained the meaning of PPR. I went through the statutory declaration he completed and asked if he had a third party living in the grant property with him. He said no. I then explained to him that I have a customer who appeared on third party responses living at the same time he said he was living in the property. He did not disclose any information to me. I explained that during the investigation and conversation if the CC is not satisfied the penalty could be high but if he discloses information the penalty will be low. He did not disclose any information.

52. On 27 November 2019, the respondent wrote to the applicant by email in the following terms:

The Chief Commissioner has decided to reverse the decision to pay you the First Home Owner Grant on the grounds that you failed to meet the residency requirement.

The Chief Commissioner is not satisfied that the residency requirement has been met.

Chief Commissioner has reviewed all supporting documents provided and from external stakeholders. The test is whether the grant property was used as your principal place of residence where there is a degree of permanence.

The objective test in making determination on this case is consideration to be given in considering the extent and quality of use and occupation to the grant property.

It is evident from the response from ATO response confirms [sic] that the home address was [Epping Property] for the financial year 2015. Electoral Roll also recorded as [Epping Property]. Transport NSW also confirms there was another customer residing in the grant property during the residency requirement.

Attached is the Finalisation Letter and Assessment for First Home Owner Grant.

53. The attached finalisation letter was addressed to the Epping Property but was not addressed to the applicant and instead was addressed to a “Wei Zhang”. It did refer to the applicant’s “Client ID” and to the Turrella Property. The finalisation letter included:

I wish to advise that we have completed our investigation into your eligibility for the First Home Owner Grant (New Homes) paid to you for the grant property.

[TURRELLA PROPERTY]

After reviewing your case and the information held by the office, I have decided to reverse the decision to pay you the grant on the grounds that you failed to meet the residency requirement.

Pursuant to section 12 of the First Home Owner Grant (New Homes) Act 2000, an applicant for the first home owner grant must:

•   commence occupation of the property to which the application relates as the applicant’s principal place of residence within 12 months of completion of the eligible transaction or the period approved by the Chief Commissioner under this section, and

•   occupy the property as your principal place of residence for a continuous period of at least 6 months.

Information made available to the Chief Commissioner during the compliance investigation, confirms that your principal place of residence was [Epping Property].

Information obtained from external stakeholders like ATO, Transport NSW, Electoral Roll, confirms your principal place of residence was not the grant property.

Under section 45 of the First Home Owner Grant (New Homes) Act 2000, you are now required to repay the grant and any penalty as shown on the enclosed notice of assessment.

54. The Notice of Assessment was correctly addressed to the applicant at the Epping Property. It required payment of $15,000, together with a penalty of 30 per cent of $15,000.

55. On or about 13 January 2020, the applicant lodged his notice of objection.

56. On 25 May 2020, Ms Tasich of the respondent sent a letter, referred to as a requisition letter, to the applicant.

57. On 31 May 2020, the applicant responded by email:

Before I submit any documents that contain my personal information requested in the requisition letter, can you please explain who is “WEI ZHANG” on the letter (see attached) sent by NSW REVENUE?

My concerns are:

1.   Who was the target of this investigation, could the investigation target the wrong person from the beginning?

2.   It was obvious that NSW REVENUE did not handle my or any other people’s information properly, I certainly can NOT trust you/NSW REVENUE with any more of my personal information.

58. On 1 June 2020, Ms Tasich responded by email to the applicant:

I have been allocated your objection you lodged to the repayment of your First Home Owner Grant benefit.

As per my requisition letter attached, the information in the said letter is addressed to the correct person with correct reference numbers and has been received at the correct email address provided by you. Any discrepancies in prior correspondence has since been rectified.

Also, the original notice of investigation attached shows the investigation that commenced on 6/05/2019 was in fact addressed to yourself, again addressed to the correct person with correct reference numbers to which you received and replied accordingly.

As outlined in my requisition letter, the onus is on the objector to provide any necessary evidence to prove your case in accordance with section 88 of the Taxation Administration Act 1996. The determination of your objection will remain suspended until the information requested is provided.

Alternatively, if you do not provide the information requested, a determination will be made regardless.

59. The applicant responded by email as follows:

As in the requisition letter,

•   Full bank statements from 1/01/2015-31/07/2015;

see attached file in this email.

•   Phone bills in their entirety from 1/01/2015-31/07/2105; and

I don’t have phone bills from 1/01/2015-31/07/2015.

•   Advise how you travelled to and from Turrella to your place of work in Macquarie from January 2015 – July 2015.

I travelled from Turrella to my place of work in Macquarie from January 2015 – July 2015 by driving.

I appreciate this review is conducted independently as it should be, not reply on the previous investigation conclusion letter that was addressed to “WEI ZHANG”. Thanks.

60. Attached to the applicant’s email were partial bank statements for a Commonwealth Bank account ending #6603 in the applicant’s name, for:

1. the period ending 30 April 2015. The part of the bank statement produced does not allow identification of its commencement period, or the address of the applicant;

2. the period 1 May 2015 to 31 October 2015, addressed to the applicant at the Epping Address.

61. On 9 June 2020, the respondent wrote to the applicant notifying him that his objection had been disallowed. The respondent’s letter included:

We refer to your objection dated 13/01/2020 regarding the assessment notice issued on 27/11/2019 for repayment of the first home owner grant.

After careful consideration, your objection has been disallowed.

Your objection is in relation to an assessment dated 27/11/2019 for the repayment of the $15,000 First Home Owner Grant (“the Grant”) and imposition of a penalty of $4,500, totalling $19,500. You have objected to this assessment on the basis you have met the residence requirement.

...

The property was acquired on 30/12/2014 as a 1-bedroom, 1-bathroom unit.

Whilst you state in an earlier declaration that you resided in the property from 1/01/2015 – 12/07/2015 and did not reside in the home with a third party, information obtained by our office indicates another occupant was residing in the property from February 2015 who continued to reside in the property up until 2017.

Furthermore, all transactions in the bank statements provided by you for a 7-month period show no activity in or around the Turrella area during the period you claim to have resided in the property.

After reviewing all the information available to this office, the Chief Commissioner is not satisfied you could have met the residence requirement during a period in which the property was simultaneously occupied by a third party.

62. On or about 25 August 2020, the applicant filed his application for administrative review. The grounds of application were described as follows:

1.   I had provided all of the evidence requested by notice of investigation, include electricity bill, gas bill and Internet bill.

2.   The decision made on 27/11/2019 was not address to me – QIAO WANG, it addressed to WEI ZHANG, a total stranger that I do not know of.

3.    had provided my bank statement to prove that there was no rental income.

63. On 15 September 2020, the Tribunal made orders for the applicant and the respondent to file and serve any evidence and written submissions upon which they wished to rely at the hearing. The applicant subsequently filed and served his statutory declaration of 18 May 2019, but did not file and serve any other evidence, or written submissions.

64. It is common ground that the applicant worked at Macquarie Park near Epping at all relevant times.

The first and second decisions to (1) reverse the earlier decision to authorise payment of the grant and (2) require the applicant to repay the amount of the grant

65. The central issue in the review of the first and second decisions is whether the applicant met the residence requirement.

66. Section 28(3) of the FHOG Act provides that the applicant has the onus of proving his case. The applicant must prove that he occupied the Turrella Property as his principal place of residence for a continuous period of six months starting within 12 months of the completion of the agreement to purchase the Turrella Property.

67. The requisite standard of proof is the balance of probabilities: see Chief Commissioner of State Revenue v Ferrington (GD) [2004] NSWADTAP 41 at [10]; Cornish Investments Pty Ltd v Chief Commissioner of State Revenue (RD) [2013] NSWADTAP 25 at [31]; Wang v Chief Commissioner of State Revenue [2016] NSWCATAD 61 at [9]; Laurence and Marion v Chief Commissioner of State Revenue [2020] NSWCATAD 93 at [7]-[8], and the authorities there cited.

68. Section 28(3) of the FHOG Act is in similar terms to s 100(3) of the Taxation Administration Act 1996 (NSW). In Levitch Designs Associates Pty Ltd atf Levco Unit Trust v Chief Commissioner of State Revenue [2014] NSWCATAD 215 at [27] Senior Member Sorenson said the following as to what is required for an applicant to prove their case:

In a review application under Part 10 of the Act, the applicant "has the onus of proving the applicant's case" (s 100(3)). This requires the applicant to prove or establish on the balance (preponderance) of probabilities all matters necessary to enable a tribunal to answer the statutory question in the applicant's favour, and all the facts on which the applicant relies to claim any exemption. The legislation does not place any onus on the Chief Commissioner to show that the assessments were correctly made. Nor is there any statutory requirement that the assessments should be sustained or supported by evidence. The burden on the applicant is not necessarily discharged by showing an error by the Chief Commissioner in forming a judgment as to the amount of the assessment. It is for the taxpayer to discharge the burden of proof by establishing what the correct amount of an assessment should be. See Cornish Investments Pty Ltd v Chief Commissioner of State Revenue (RD) [2013] NSWADTAP 25 at [5-7], [29-36] and cases there cited; see also Lend Lease Development Pty Ltd v Commissioner of State Revenue (Vic) [2012] VSC 108 at [51], Conder Tower Pty Ltd v CSR [2012] VSC 107 at [46], Wesfarmers General Insurance Ltd v CSR [2009] VSC 599 at [14], Theophilas v Chief Commissioner of State Revenue [2014] NSWCATAD 100 at [41-42]. However, the taxpayer's evidence is not to be regarded as prima facie unacceptable and "must of course be considered on its merits, in the circumstances of the case, without any prepossession, favourable or unfavourable": McCormack v FCT (1979) 143 CLR 284 at 302 per Gibbs J.

(emphasis added)

69. Proof of the balance of probabilities requires that the Tribunal feel an actual persuasion that the relevant event occurred: see Briginshaw v Briginshaw (1938) 60 CLR 336 at 361.

70. As mentioned above, the relevant event is that the applicant occupied the Turrella Property as his principal place of residence for a continuous period of six months starting within 12 months of completion of the agreement to purchase the Turrella Property. The date of completion was 30 December 2014.

71. In Deverich v Chief Commissioner of State Revenue [2010] NSWADT 268 [39]-[45] Judicial Member Verick provided some guidance as to proof of occupation as a principal place of residence under the FHOG Act:

38 The FHOG Act and the Duties Act do not provide any technical or legal meaning for the expression “principal place of residence” and, accordingly, the expression has its ordinary meaning. A person’s place of residence is usually understood as “the place where he eats, drinks and sleeps” (per Ridley J in Stoke-On-Trent Borough Council v Cheshire County Council [1915] 3 KB 699 at 706). The use of the term “principal” in the expression suggests that a person may use and occupy more than one residence but that the exemption is only available for the principal place of residence of the person.

39 In ascertaining whether a particular residence of a person is the principal place of residence of that person, it is necessary to use an objective test and the conclusion is determined by considering the extent and quality of use and occupation of the residence in each case. The onus to establish one’s principal place of residence is usually discharged on the basis of various matters. It is important to note, as observed by the Victorian Civil and Administrative Tribunal in Re Ziino and Commissioner of State Revenue [2004] VCAT 1707 that:

“… while sleeping by itself in a place can be an indication of a principal place of residence, it is not the sole matter to be taken into account. One needs to look at a whole indicia of matters …One needs to look as well at where the applicant ate; his use of electricity and the furniture and fittings and other matters such as entertainment of friends in the house… Sleeping in a place does not make a residence. It has got to be the whole indicia of things that are done in a home which are described in the cases…”

40 Other indicia of matters would include evidence of an applicant’s use of the address of the property as the residential address for purposes of his or her mail, driving licence, on the electoral roll, in immigration records, income tax returns and telephone bills.

41 In Chief Commissioner of State Revenue v Ferrington (GD) [2004] NSWADTAP 41 the Appeal Panel of the Tribunal agreed that “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 occupation for any other reason”. The Appeal Panel also held that “the intention of the person concerned, gauged objectively, is relevant but not determinative of the issue”. (Also see Zakariya v Chief Commissioner of State Revenue [2003] NSWADT 26).

42 The FHOG and Duties Acts require more than just acquisition of a property and using the property as a place to sleep on a few occasions during the period of six months. The onus is on the applicant to demonstrate that the grant property is acquired and occupied as the applicant’s principal place of residence.

43 The applicant only used the place to sleep on about six occasions during the period and all matters that are performed to make a place a residence were carried out elsewhere. His own evidence was that he did not place any furniture or personal belongings at the grant property and that on the occasions he slept there, he slept on the floor. His absences on work related trips would have been viewed differently if, in fact, he had established the grant property as his principal place of residence during the period he was required to do so. The evidence is clear that he attempted to satisfy the residence requirement in a peculiar manner. He entered into an arrangement with the tenant to allow him to use a room during the relevant period. He did not have control of the whole grant property at any time and during the relevant period the tenant continued to occupy and use the property as her place of residence.

44 It seems to me that the applicant did not do enough to establish that the property was his principal place of residence during the period to bring himself within the terms of the two Acts. As observed by the Appeal Panel in Ferrington “a connection to a place of residence of a transient, temporary, contingent or passing nature is not sufficient, nor occupation for any other reason”. In this matter the occupation of a room at the grant property on about six occasions was an attempt to artificially satisfy the residence requirement.

45 The relevant provisions also require that, to satisfy the residence test, an applicant has to occupy the grant property for a continuous period of six months. This issue was fully considered by the Tribunal in Cameron and requires the applicant to physically occupy the grant property during the period of six months. In this matter, the evidence is clear that the applicant merely occupied the property for a few days. The applicant also fails on this ground to retain the grant and the First Home Plus Concession.

72. In Khalil v Chief Commissioner of State Revenue [2011] NSWADT 276 Judicial Member Verick stated at [30] and [35]-[37]:

30 The essential issue for determination is whether the applicant complied with the 'residence requirement' for purposes of both FHOG Act and the Duties Act. The 'residence requirement' required the applicant to occupy the home as a principal place of residence for a continuous period of at least 6 months. There are strictly two tests to be satisfied. Firstly, the applicant has to demonstrate that he or she occupied the property for a period of at least six months. Secondly, and more importantly the property must be occupied during the relevant period as the principal place of residence of the applicant.

…

35 In my opinion, the applicant also did not satisfy the second test to comply with the 'residence requirement'. The various indicia referred to in the cases require more than merely sleeping at the property to satisfy this test. In this matter, on the applicant's own evidence was that "he had intended to stay at the property for about six months" and then move back to his parents' house. Against the background, that he had let the property on a lease soon after its purchase and continues to lease the property to Ms Ali, the only reasonable inference that can be made is that he purchased the property as an investment property and not as a property for its occupation as his home.

36 His effort to satisfy the residence requirement was fairly structured when viewed against all the evidence. There was no element of permanence in the stay. The stay was not for purposes of establishing his principal place of residence but as observed by the Appeal Panel in Ferrington "for some other purpose". Here that other purpose was to be able to get the grant and the First Home Plus Concession. The six months rule was introduced because there were cases where after short periods of some days applicants moved out of the properties on various grounds and were able retain the grant. The six months period, although an arbitrary period, allows a fairer assessment of the nature and quality of the occupation of a property by an applicant. In this matter, the evidence was very clear that the applicant had no intention of making the property his principal place of residence and perhaps got the impression that by merely sleeping at the place for six months the 'residence requirement' would be satisfied. An applicant has to do more to establish that a property was occupied as his or her principal place of residence. His claim that he occupied the property as his principal place of residence must also fail.

37 I do not think the grant and First Home Plus Concession are intended to assist first home buyers to buy investment properties. The law recognises that in some cases, circumstances may change and first home owners may have to let the properties, for example if they are required for work reasons to move elsewhere. But that is not the case in this matter.

Submissions

73. The applicant’s submissions on this issue may be summarised as follows:

1. the information that he provided to the respondent by way of his statutory declaration, utility accounts and bank account statements demonstrates that he met the residence requirement;

2. the bank statements he provided do not record the receipt of rental income from the Turrella Property;

3. the further information tendered by the respondent is not inconsistent with the information that he provided;

4. someone may have used the address of the Turrella Property as their address in circumstances where, as at 2015, he was a single man and sometimes invited people to sleep over.

74. The respondent’s submissions may be summarised as follows:

1. on the evidence before the Tribunal, the Tribunal should not be satisfied that the residence requirement was met (alternatively, the Tribunal should make a positive finding that it was not met);

2. the particular evidence which suggests such a conclusion is:

1. evidence that Ms Fatema was living at the Turrella Property and in particular:

1. Ms Fatema’s notification to:

2. Transport for NSW that the Turrella Property was her residence from 12 February 2015 to 9 January 2017;

3. the Electoral Commission that the Turrella Property was her residence as and from 7 June 2015;

4. the electricity account for the Turrella Property being in Ms Fatema’s name from 1 September 2015 to 19 May 2016;

2. the applicant’s statement to the respondent on 2 August 2019 that he lived at the Turrella Property with no other person;

3. evidence that the applicant was living at the Epping Property and in particular that:

1. on 2 July 2014, the applicant changed his address details with Transport for NSW to the Epping Property and that address remained the same at all material times;

2. on 30 July 2014, the applicant changed his address on the electoral roll to the Epping Property and he remained enrolled at that address at all material times thereafter;

3. the address shown on the applicant’s 2015 and 2016 taxation returns was the Epping Property;

4. the applicant was working at Macquarie Park, which was close to the Epping Property but more than one hour’s drive from the Turrella Property.

Consideration

75. The applicant stated in his statutory declaration that he occupied the Turrella Property for the period from 1 January 2015 until 12 July 2015. He does not contend that he occupied the Turrella Property at any other time and in any event his 2016 taxation return includes disclosure that the Turrella Property was rented from 1 August 2015. Whilst, as the respondent pointed out, there is an inconsistency between the date of occupancy set out in the application dated 4 June 2015 (8 January 2015) and the commencement date referred to in the statutory declaration dated 18 May 2019 (1 January 2015) this is of little moment.

76. The question for determination is whether the Tribunal is satisfied, on the balance of probabilities, that during the period from 1 January 2015 until 12 July 2015 (Relevant Period) the applicant occupied the Turrella Property as his principal place of residence.

77. The Tribunal is not so satisfied, for the following reasons.

78. First, it seems likely that Ms Fatema was living at the Turrella Property from at least as early as 12 February 2015, on which date she notified Transport for NSW that the Turrella Property was her address.

79. The likelihood that Ms Fatema was living at the Turrella Property during the Relevant Period is increased by the fact that she used the Turrella Property as her address in her enrolment with the Electoral Commission on 7 June 2015.

80. It is inherently improbable that a person would notify two government agencies that a particular address was her address if that were not the case. The applicant’s suggestion that Ms Fatema may have done so because she became aware of the address as a result of casual contact with the applicant is unconvincing and is not accepted.

81. This is particularly so when, as the evidence suggests, there can be little doubt that Ms Fatema lived at the Turrella Property from 1 September 2015, when, despite not being the owner of the Turrella Property, she became the party liable to pay the electricity accounts for that property, until 19 May 2016 when she ceased to be so liable.

82. Secondly, if Ms Fatema was living at the Turrella Property from 12 February 2015 until at least 7 June 2015 it is likely that the applicant was not. In this regard, the applicant did not suggest that Ms Fatema lived at the Turrella Property with him. Indeed, he indicated to the respondent that he was not living with anyone and indicated to the Tribunal that he was single during the Relevant Period.

83. Thus, it seems likely that Ms Fatema lived at the Turrella Property during the Relevant Period and that the applicant did not.

84. Thirdly, there is some evidence which suggests that the applicant resided at the Epping Property during the Relevant Period. In particular:

1. throughout the Relevant Period, the applicant maintained the Epping Property as his address with both Transport for NSW and the Electoral Commission. The applicant did not suggest that this was an oversight, and it seems unlikely that the absence of a notification of change of address to Transport for NSW was an oversight in circumstances where the applicant had previously notified Transport for NSW of nine changes of address between March 2004 and October 2013;

2. the applicant’s mailing address with Sydney Water for the Turrella Property was the Epping Property from January 2015 until July 2018;

3. the applicant’s postal address on his application form lodged on or about 4 June 2015 (i.e. during the relevant period) was the Epping Property;

4. the applicant’s residential address on his 2015 taxation return was the Epping Property. However, this is of lesser weight in circumstances where the return was lodged after the Relevant Period.

85. Fourthly, there is no evidence which suggests that it is more likely than not that the applicant occupied the Turrella Property during the Relevant Period. In this regard:

1. the evidence that the applicant was liable for the utility accounts during the Relevant Period and that they were addressed to him at the Turrella Property is consistent with him living at the Turrella Property, but is also consistent with him living elsewhere and agreeing, as landlord, to bear such costs;

2. whilst the bank statements for account #6603 do not appear to record the receipt of rental income during the Relevant Period, the applicant has not provided evidence that account #6603 was his only bank account. Further, the statements for account #6603 suggest that there were other Commonwealth Bank accounts held by the applicant (#s 2177 and 7454);

3. there is no evidence from the applicant, other than the assertion in his statutory declaration, which establishes his physical presence at or around the Turrella Property. For example:

1. there is no photographic evidence of the Turrella Property, of the applicant being present, or of its furnishings which might tend to suggest that the applicant was in occupation;

2. there is no evidence of bank statements which show transactions in or around the Turrella Property during the Relevant Period. The only bank statements which have been produced show activity around the Epping area. Whilst it is not surprising that those statements record transactions in that area, given that the applicant worked at Macquarie Park and his parents lived at the Epping Property, the complete absence of transactions around the Turrella area is significant;

3. there is no evidence of mobile telephone accounts which indicate from where calls were made during the Relevant Period.

86. There is also no explanation for the absence of such evidence. In this regard, the applicant has been on notice since 27 November 2019 that the respondent was of the view that the applicant had not occupied the Turrella Property, that someone else occupied the Turrella Property and that the applicant lived at the Epping Property during the Relevant Period. This was reiterated in correspondence in June 2020 and in the evidence served by the respondent as part of these proceedings.

87. For all of the above reasons, the Tribunal does not feel an actual persuasion that the applicant occupied the Turrella Property for six months during the Relevant Period, much less that he did so as his principal place of residence and thus the applicant has not established this on the balance of probabilities that he met the residence requirement.

88. As the Tribunal is not satisfied that the applicant met the residence requirement, the first and second decisions should be affirmed.

The third decision: to require the applicant to pay a penalty

89. As noted above, s 45(3) of the FHOG Act provides:

If an applicant (or former applicant) for a first home owner grant fails to make a repayment required under this section or the conditions of the grant, the Chief Commissioner may, by written notice, impose a penalty not exceeding the amount the applicant is required to repay.

90. Thus, s 45(3) allows the respondent to impose a penalty where an applicant for a grant fails to make a repayment required as a condition of the grant.

91. As noted above, the Notice of Assessment included a penalty of 30%.

Submissions

92. The applicant made no submissions on the respondent’s decision to require the applicant to pay a penalty.

93. The respondent’s submissions on this issue may be summarised as follows:

1. the respondent’s principal submission is that as no separate argument has been raised by the applicant in relation the amount of penalty, the respondent’s decision to impose penalty ought to be affirmed: see Taylor v Chief Commissioner of State Revenue [2004] NSWADT 36 at [21];

2. the respondent’s alternative submission is that the 30% penalty is appropriate in light of the conduct of the applicant and penalties imposed in similar matters;

3. the present case is to be contrasted with cases in which an applicant has freely admitted to the Tribunal and the respondent that they have failed to meet the residence requirement or has failed to move into the property due to factors largely beyond their control, and in which the Tribunal has held that a penalty of 0-20% would likely be appropriate: see Elskaf v Chief Commissioner of State Revenue (GD) [2006] NSWADTAP 10 at [14] and the cases there cited, Knight v Chief Commissioner of State Revenue [2008] NSWADT 83 at [28]-[38].

Consideration

94. The Tribunal is satisfied that:

1. it was a condition of the grant, imposed by s 20(2) of the FHOG Act, that the applicant repay the grant if the residence requirement was not complied with, with such repayment to be made within 14 days after the end of the period for compliance;

2. the period allowed for compliance required that the occupation commence within 12 months of 30 December 2014 (i.e by 30 December 2015) and be completed within six months thereafter;

3. the period for compliance and a further 14 days passed without payment;

4. thus, the respondent was entitled to impose a penalty under s 45(3) of the FHOG Act.

95. The Tribunal is also satisfied that a penalty of 30 per cent is with the range of penalties that might be imposed in the circumstances of the present case. Thus, the decision to require payment of a penalty should be affirmed.

The finalisation letter

96. As noted above, one of the grounds of the application to the Tribunal is that the finalisation letter was addressed not to the applicant, but to “Wei Zhang”. This is not relevant to the issues which the Tribunal is required to determine on this review. In any event, there can be no doubt that the applicant was aware of the three decisions, from the respondent’s 27 November 2019 email and the attached finalisation letter and Notice of Assessment. Further, the applicant filed a Notice of Objection against those decisions.

Conclusion

97. For the reasons set out above, the correct and preferable decision is to affirm the decisions of the respondent to:

1. reverse the respondent’s earlier decision to pay the grant to the applicant;

2. require the applicant to repay the amount of that grant; and

3. require the applicant to pay a penalty.

Order

98. The decisions of the respondent under review are affirmed.

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I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.

Registrar

Decision last updated: 02 March 2021