Black v Chief Commissioner of State Revenue

The Caringbah property 10In his witness statement, the Applicant explained that this property contained a three floor double brick house with tile roof. The property was on Yowie Bay on an incline block with an absolute deep water front and a pontoon and jetty. 11The Applicant said that he had owned the Caringbah property since about 1997 and, excluding the period relevant in the proceedings, had resided in it at various times including 1997 and 1998 as well as between January-June 2005. He said that for the majority of the time, however, the property had been rented out. 12In about June 2005, the Applicant leased the property to a tenant (referred to hereafter as "the tenant") for one year. In late 2007, the Applicant said that he told the tenant that he (the Applicant) intended to go into occupation of the Caringbah property and in about January 2008 he served the tenant with a notice to vacate. The tenant did not vacate the property. The Applicant was concerned at this time that the tenant had done other things to contravene the lease as well. 13In February 2008, the Applicant commenced proceedings in the CTTT for the lease to be terminated and to obtain an order for possession of the Caringbah property. 14In 2008, the Applicant explained that the relationship between himself and the tenant seriously deteriorated. The Applicant explained that on 20 March 2008 he went to do an inspection of the property and to carry out some maintenance whilst the tenant was absent. After this, the Applicant said that he was not able to go to the property because of the tenant's threats of violence. 15This culminated in the Applicant taking out an interim Apprehended Violence Order ("AVO") concerning the tenant on or about April 2008. 16The interim AVO was varied on or about 16 June 2008 as a result of an application by the Applicant in respect of a further incident at the Caringbah property involving the tenant on 14 June 2008. 17The Applicant tendered various documents concerning the above orders including statements made to the police and by the police in respect of the matter. It appears that the tenant breached the AVO on 17 June 2008 and was arrested and on 22 October 2008 he was ultimately convicted in relation to that breach at Downing Centre Local Court. 18On 21 May 2008, the CTTT terminated the tenant's lease of the Caringbah property. The Sheriff took possession of the Caringbah property pursuant to a Warrant of Possession on or about 17 June 2008. 19The Applicant claimed that his plans to move into the Caringbah property were frustrated and delayed by the damaged and dirty state in which the tenant left the premises. 20The Applicant tendered various photographs he said that he had taken of the Caringbah property. Some of those were dated March 2008 and showed tyres, old tiles and carpet that appeared to be situated on one side of the house and rubbish bags, a ladder and other items on the other side of the house. There also appeared to be some cane chairs and a lounge chair at the back with some white goods and other assorted furniture at what appears to have been the back of the house. 21Some photos were dated in April 2008 and showed a man (who the Applicant said was the tenant) outside the house with a seat, BBQ and child's bike in the background. 22Other photographs were dated in June 2008. The ones taken outside the house showed various old chairs, gas bottles, carpet underlay and various other items as well as a large blue skip that appeared to be filled with a large number of old items of furniture, toys, computer monitor, building materials and other rubbish. The one photograph taken inside the house showed two lounge chairs, a bag of what appeared to be presents (which appears to be in one of the external photos as well) and a bag of rubbish. 23The final photographs were dated July 2008 (i.e. at a time after the Applicant took possession of the Caringbah property) and showed a large blue skip that appeared to be full with four mattresses placed at the top. There were also photos of old lounge chairs, tables and a BBQ near the skip. The Applicant said that these photographs showed the "junk" that had to be removed before the Caringbah property could be occupied by him. 24The Applicant also tendered as evidence, receipts for removal of some of the aforementioned "junk" (including the skip bins) and receipts for painting and decorating. The Applicant also stated that a Cocas Island palm that had grown on the Caringbah property fell on his neighbour's balcony. The Applicant had to cut up and remove the tree. 25The Applicant stated that once the Caringbah property was fit to occupy, he moved into the property on the October long weekend in 2008. After that, the Applicant said that the Caringbah property was his "principal place of residence". His furniture and personal effects were there. He slept and ate meals there. The Applicant also said that the Caringbah property was his "principal place of residence" as at 31 December 2008.

The Cronulla property 26At all relevant times, the Applicant was also the registered proprietor of the Cronulla property. This property was about a 3-4 minute drive from the Applicant's office where he worked as a solicitor. The Cronulla property contained a weatherboard and fibro single story house on a level block. 27The Cronulla property had a Development Approval ("DA") from the relevant Council for a dual occupancy. The Applicant said that, in view of this, for years he only did essential repairs and no maintenance or painting/redecoration to the property as it was his intention to demolish the existing house, to move into the Caringbah property and then to lease two new townhouses that would be constructed at the Cronulla property. 28The Applicant then explained that when the Global Financial Crisis occurred in 2008, he was no longer confident to proceed with the demolition and building at the Cronulla property. Instead he moved into the Caringbah property and attended to the "redecoration" of the Cronulla property. 29The Applicant said in his witness statement that he was not sure which property would have to be sold. The full impact of the crisis was being experienced at the time and the Applicant did not know if the Caringbah property could be sold given the market for waterfront properties was depressed and he did not want to sell for any price. He decided that if the Caringbah property did not sell for a reasonable price, then he would sell the Cronulla property as he perceived that the market was more buoyant for properties of this nature as it was cheaper. 30The Applicant said that he had also been advised by Ms Hibberd, the real estate agent, that the market was unpredictable but the Cronulla property would potentially have more marketing appeal as a residence that could be used immediately as a family home or leased as such by a purchaser. 31Once the "junk" was removed from the Caringbah property and a fallen tree removed, the Applicant said that he proceeded to do neglected redecorating and maintenance at the Cronulla property. The Applicant said that in his zeal to make up for years of neglected maintenance he undertook too much at once and attempted to correct "bowing" in the old plaster walls in some of the bedrooms. This resulted in those bedrooms becoming unusable. This did not affect the Applicant's office/studio. 32In 2008, the Applicant said in his witness statement that he had a home office/studio at the Cronulla property that he used for researching, writing and editing screenplays and stories. He said that in 2008, it was his practice to work late at night on those screen plays. He said that he suffered insomnia at the time and he worked until 2.00-2.30am and sometimes 4.00 and 5.00 a.m. The Applicant tendered a document that appeared to the Tribunal to contain a synopsis and other details of a screenplay trilogy written by the Applicant. He noted that he had written three screenplays. 33The Applicant said that in October/November 2008 he was too busy to re-locate his studio to the Caringbah property as there were other pressing jobs that had priority and he could not afford the interruption to his work. He said that he intended to do so at Christmas in 2008 but the intervening sale of the Caringbah property meant that this did not take place. 34The Applicant said that during the above period he was at the Cronulla property most days after work feeding the cats (which he explained were not pets but essentially adopted stray cats), working on the house, painting and redecorating and then working in his studio at night as well as working on weekends. He said that this would account for the extra use of electricity at the Cronulla property in invoices that had been summonsed by the Respondent. 35The Applicant explained that he painted both the interior and exterior of the Cronulla property at this time. When the Applicant was informed that the scraping of paint from the fibro might release asbestos fibres into the air, he was advised by the Asbestos Hotline to thoroughly hose the fibro before scraping the paint. 36The Applicant said that he also watered the gardens at the Cronulla property on occasion. The same was not done at the Caringbah property as it had no gardens but numerous trees. This evidence and that in the preceding paragraph appeared to the Tribunal to have been given to explain the relatively higher water usage at the Cronulla property during the relevant period as compared to the Caringbah property. 37The Applicant has continued to remain the registered owner of the Cronulla property and he presently resides there.

Events preceding the relevant land tax year 38The Applicant gave evidence in chief about certain events that occurred prior to the relevant land tax year and period in question. 39The Applicant tendered (i) a copy of the front page of a contract for the sale of the Cronulla property and a section 149 certificate dated 5 April 2007 and (ii) a copy of the front page of a contract for the sale of the Caringbah property and a section 149 certificate also dated 5 April 2007. The Applicant said that this showed that neither property (i.e. Cronulla nor Caringbah) had particular significance for him and both were prepared for marketing in anticipation of a sale in 2007. The Tribunal notes that there is no date on the front pages of the contracts tendered.

Other evidence in respect of the relevant land tax year (and the relevant period from 1 July 2008 to 31 December 2008) including the sale of the Caringbah property 40The Respondent summonsed a number of documents from the real estate agent, Ms Hibberd and these documents were duly tendered as evidence. One document was a copy of an exclusive agency agreement in respect of the Caringbah property. This agreement was dated 4 August 2008 and the Applicant agreed in cross-examination that he had signed the agreement and that it super-ceded any prior agency agreements. 41Amongst the summonsed documents that were tendered by the Respondent was a full page colour advertisement for the Caringbah property. The Applicant agreed in cross-examination that there was no advertisement produced in relation to the Cronulla property although he maintained that he was preparing the Cronulla property in October 2008-31 December 2008 in anticipation of a possible sale. 42The Applicant tendered a copy of a sales inspection report and open selling agency agreement. The document is dated 4 March 2008 and appears to have been signed by a real estate agent on page 1 but was not signed by the "Principal" (i.e. the Applicant) although there is a date next to the space for signature. That date was 20 August 2007. The document lists the properties for sale as the Caringbah property and the Cronulla property although in relation to the agent's opinion as to current estimated selling price, there is only one price range given and it is unclear why this is so, if there were in fact two properties listed for sale. This was not explained in the evidence. 43On 5 December 2008, contracts were exchanged for the sale of the Caringbah property by the Applicant to a third party. The Applicant maintained that sale of one of his properties was necessary to pay his outstanding land tax debt in respect of the Caringbah property of some $85,000.00. This matter had been discussed with the Respondent's officers for some time and some notes were included by the Respondent in the section 58 documents. 44The Tribunal also gave leave to the Applicant, at the hearing, to produce his own file-notes of conversations with the Respondent's officers regarding his land tax debt. The leave was given because the Applicant was self-represented and also because it did not appear to have been made clear by the Respondent that specific questions would be raised with the Applicant about what was actually said in those conversations. No witness statements were tendered in advance by the Respondent's officers in relation to the relevant conversations. 45The Applicant produced his file-notes of the above conversations and these were provided to the Respondent overnight for review and the Respondent's Counsel was given leave to and did cross-examine in relation to this matter following that review. 46Ultimately the parties, with leave, filed a submission after the hearing to the effect that the Respondent no longer took issue with the Applicant's payment of the land tax assessment by instalments in 2008 and 2009 and, further, that the Respondent made no submission adverse to the Applicant's credit on the basis of any non-compliance with arrangements for payment of land tax by instalment. 47The Applicant had sought a land tax adjustment from the purchaser of the Caringbah property but this was declined on 3 December 2008 prior to exchange of contracts. In his witness statement, the Applicant said that before exchange of contracts for the Caringbah property, the sale contract originally had a settlement date before Christmas and in lieu, thereof a land tax adjustment clause. The Applicant said he was not sure if his principal place of residence exemption would be granted in respect of the Caringbah property due to his moving in much later than he had originally intended. He said he included these land tax adjustment clauses in an attempt to avoid the present situation that confronted him (presumably a reference to the present proceedings). He noted that as it was a buyer's market, he could not insist on either of the land tax adjustment clause and the buyer refused to settle until 2009. 48The contract for the sale of the Caringbah property was ultimately settled on 16 January 2009.

The evidence of Mr Richardson 49Mr Richardson, a solicitor and currently employed by a Local Council prepared a statutory declaration that was tendered in evidence by the Applicant. Mr Richardson was cross-examined by the Respondent's Counsel and re-examined by the Applicant. 50In his Statutory Declaration, Mr Richardson said that he was a friend of the Applicant and on a number of times in 2008, he had been asked by the Applicant "to assist him with moving furniture and personal affects (sic)" at the Caringbah property. 51He also said that on 15 January 2009, he had also assisted the Applicant to remove "personal affects (sic) and furniture" from the Caringbah property. He said that the Applicant had told him that settlement of the property was to take place the next day and he had to remove the last of his property before the settlement. 52Under cross examination, when asked about his friendship with the Applicant, Mr Richardson said that he had met with the Applicant between a dozen to 20 times. The Respondent asked him where this had occurred and Mr Richardson replied without hesitation that it was at the Cronulla property. 53When asked by the Respondent's counsel as to what items he had moved at the Caringbah property, Mr Richardson referred to "chairs and a lounge". He was aware that Mr Richardson was having trouble with the tenant because he believed the tenant was there when he helped Mr Richardson move. He said he saw a man standing there at the time that he believed to be the tenant. 54On 15 January 2009, Mr Richardson recalled helping the Applicant move outdoor furniture and cupboards and things to that effect. He also said he couldn't really remember the items and he was just giving a friend assistance when he needed it. 55He agreed that he was uncertain whether the items he moved belonged to the Applicant or the tenant. 56In relation to the use of the words "personal affects" (sic) in his statutory declaration, he said that the Applicant had asked him to make a declaration. He was not sure who typed it but he had read it and signed it. He thought that "personal affects (sic)" were his own words but said that he recalled that there was furniture and as to whether there were other effects, personal or not, he said "he could not categorically say". 57When asked by the Respondent's counsel as to whether he was aware of the reason why his statutory declaration was obtained by the Applicant, he answered that he was not. 58Under re-examination, Mr Richardson recalled cutting the lawns at both the Caringbah and Cronulla properties about 2 to 3 times each (and could not say if it was more than this) and that he had also been at the Caringbah property with his son when a tree fell and a chain-saw had to be used to cut it up. 59He agreed in re-examination that he had not been asked by the Applicant to say anything that was not true.

The evidence in relation to utilities and other bills 60The Respondent tendered into evidence copies of electricity and water usage bills for the relevant period (and those before and after) for the Caringbah and Cronulla properties. 61The Tribunal has examined those invoices and notes the following: a) The electricity invoices for the Cronulla property were for quarterly periods from approximately 1 April 2007 to 2 April 2009. At all relevant times, the Applicant owned the Cronulla property. The quarterly invoices appeared to range from a low of $86.35 per quarter to $103.63 per quarter. The electricity bill for the actual quarter in question (1 October 2008-31 December 2008) was in the amount of $92.24. It appeared to the Tribunal that this amount was broadly in line with other quarters that preceded it and indeed was in the same amount as the quarter that immediately followed (i.e. 1 January 2009-2 April 2009). b) The electricity invoices for the Caringbah property were also for quarterly periods. They must be viewed with some caution because up until 17 June 2008, the tenant was in the Caringbah property and accordingly would have used the electricity. Further in January 2009 the Caringbah property was sold to a third party and thus electricity usage in that quarter is not relevant. In terms of the time period that the Applicant had possession of the property, the invoices were in the following amounts $46.27 (20 June 2008-23 July 2008), $49.11 (24 July 2008-24 October 2008) and $60.36 (25 October 2008-14 January 2008). c) In relation to water usage invoices for the Cronulla property, these were for quarterly periods. The accounts for the period in question were as follows $16.10 (27/11/08) and $14.49 (26/2/09). These amounts used were broadly in line with other quarterly periods in 2007 and 2008. d) In relation to water usage invoices for the Caringbah property, similarly to electricity accounts, these must also be viewed with some caution because a tenant was in possession of the property until 17 June 2008 and the Caringbah property was also sold to a third party in January 2009. The invoice for 22 May 2008-20 August 2008 (which partly covered the period the tenant was in the property) was in the amount of $23.86. The invoice for 24 November 2008 was in the amount of $1.61. The invoice for 24 November 2008-26 February 2009 (which period partly extended beyond the sale of the property to the purchaser) was in the amount of $62.75. It can be seen that the water usage for the period from 20 August 2008 to 24 November 2008 was extremely low. (i.e. 1 kL only).

The 2009 land tax year 62Land tax is levied and payable on the taxable value of all land in New South Wales, except land which is exempted from taxation under the LTMA section 7. For each calendar year, land tax is charged on land as owned at midnight on 31 December the previous year: section 8. 63For the purposes of the 2009 land tax year, there was an exemption for land under the principal place of residence exemption as provided for in Schedule 1A LTMA. The relevant legislative provisions (being section 10(1)(r) and relevant parts of Schedule 1A) were as follows (bold added): 10 Land exempted from tax (1) Except where otherwise expressly provided in this Act the following lands shall, subject to sections 10B, 10D, 10E, 10G and 10P, be exempted from taxation under this Act: ... land that is exempt from taxation under the principal place of residence exemption , as provided for by Schedule 1A, Schedule 1A Principal place of residence exemption (Section 10 (1) (r)) Part 1 Preliminary 1 Definitions (1) In this Schedule: principal place of residence exemption -see clause 2. residential land -see clause 3. strata lot means a lot under the Strata Schemes (Freehold Development) Act 1973 or the Strata Schemes (Leasehold Development) Act 1986 . taxing date -means midnight on the thirty-first day of December. (2) For the purposes of this Schedule, a reference to the owner of land includes, if there are joint owners, any one or more of those joint owners. Part 2 Principal place of residence exemption 2 Principal place of residence exemption (1) Land used and occupied by the owner as the principal place of residence of the owner of the land, and for no other purpose, is exempt from taxation under this Act, in respect of the year commencing 1 January 2005 or any succeeding year, if the land is: (a) a parcel of residential land, or (b) a strata lot or, subject to this Schedule, land comprised of 2 or more strata lots. (2) Land is not used and occupied as the principal place of residence of a person unless: (a) the land, and no other land, has been continuously used and occupied by the person for residential purposes and for no other purposes since 1 July in the year preceding the tax year in which land tax is levied , or (b) in any other case, the Chief Commissioner is satisfied that the land is used and occupied by the person as the person's principal place of residence. (3) If the owner of land is entitled to the exemption conferred by this clause, no other person is liable to be assessed for taxation under this Act in respect of the land during the period of the owner's entitlement to the exemption. (4) The exemption conferred by this clause is referred to as the principal place of residence exemption . (5) The principal place of residence exemption is subject to the restrictions set out in Part 4. 64Section 3 of the LTMA defined the term "principal place of residence" as follows: principal place of residence of a person means the one place of residence that is, among the one or more places of residence of the person within and outside Australia, the principal place of residence of the person. 65The Applicant, pursuant to s 100(3) Taxation Administration Act 1996 (NSW) ("TAA") bears the onus of proof in the proceedings.

Part C - Issue 66The issue for the Tribunal is whether for the 2009 land tax year, the Caringbah property was exempt from land tax in the hands of the Applicant by virtue of being land used and occupied by the Applicant as his "principal place of residence" for the purposes of the LTMA (Section 10(1)(r) and Schedule 1A)?

Part D - Applicant's case 67The Applicant's case was set out in detail in initial and further written submissions and is not reproduced by the Tribunal here. 68Essentially, the Applicant claimed that once he recovered possession from the tenant on 17 June 2008, the Caringbah property needed to be cleaned and other work done before it could be used by him as a residence. The cleaning and other work was undertaken and the Applicant moved into the property on the October long weekend and resided there until the property was sold (with settlement occurring in January 2009). The Applicant contended that the Caringbah property was his principal place of residence as at 31 December 2008 and accordingly land tax for the 2009 land tax year should be assessed instead in respect of the Cronulla property.

Part E - Respondent's case 69The Respondent also set out its case in detail in written submissions and orally at the hearing and is not reproduced by the Tribunal here. The thrust of the case was as follows: a)The Applicant did not satisfy clause 2(2)(a) of Schedule 1A LTMA because he did not occupy the Caringbah property until October 2008. It was not in dispute that the Applicant did not move into the Caringbah property until the October 2008 long weekend. b)The objective evidence did not support the Applicant's contention that he used and occupied the Caringbah as his main residence even from October 2008 to 31 December 2008. The Tribunal therefore cannot be satisfied of the matters referred to in clause 2(2)(b) of Schedule 1A LTMA.

Preliminary issue - The application of clauses 2(2)(a) and 2(2)(b) of Schedule 1A LTMA 70The preliminary issue that arises for the Tribunal in this case is the relevant application of clauses 2(2)(a) and 2(2)(b) of Schedule 1A LTMA. 71In this case, the Applicant did not claim to have moved into the Caringbah property until the long weekend in October 2008. He said that he could not move into the property prior to this because of the state in which it was left by the tenant. 72It was not in dispute that that Applicant did not obtain "possession" of the Caringbah property until 17 June 2008 which followed the obtaining of a Writ of Possession from the CTTT on 21 May 2008 and the arrest of the tenant on or around 17 June 2008 for breach of an interim Apprehended Violence Order. The precise time that the Applicant could have moved into the Caringbah property did appear to be in dispute and the Respondent's Counsel suggested in final submissions that it may in fact have been as early as August or September 2008. 73Notwithstanding the above dispute, on the basis that the Applicant did not actually move into the Caringbah property until the October long weekend, the Applicant did not satisfy the requirements of clause 2(2)(a) of Schedule 1A. This is because the Applicant did not "continuously" use and occupy the Caringbah property for residential purposes for the period from 1 July 2008 to 31 December 2008. 74The Tribunal also notes that there is an additional reason why the Applicant did not satisfy the requirement of clause 2(2)(a) of Schedule 1A and that is because in the relevant six month period (1 July 2008 to 31 December 2008), the evidence suggested that another property was also being used and occupied by the Applicant (being the Cronulla property). 75The evidence of the Applicant himself was that the Cronulla property was continuously used and occupied by him for residential purposes at least up until the October 2008 long weekend. 76Further, the Tribunal has come to the conclusion that the Cronulla property continued to be used and occupied by the Applicant for residential purposes up to 31 December 2008. The Applicant continued to own and use the property and to occupy it during this period (within the meaning of "occupy" in the decided cases: Commissioner of Land Tax v Christie [1973] 2 NSWLR 526 at 533-534 per Bowen JA). The Applicant's daily routine during this period meant that he continued to go to the Cronulla property after work to perform redecorating activities as well as work on his screen plays into the early hours of the morning. He clearly retained the right to possession of this property and controlled possession ( Flaracos v Chief Commissioner of State Revenue [2003] NSWSC 68 per Gzell J). 77Accordingly, on the basis that clause 2(2)(a) was not satisfied in the present case (for either of the reasons stated above) the issue for the Tribunal is whether or not clause 2(2)(b) of Schedule 1A was satisfied. In other words, the Tribunal must decide whether or not the Caringbah property was used and occupied by the Applicant as the Applicant's principal place of residence as at midnight on 31 December 2008. 78The Appeal Panel in Chief Commissioner of State Revenue v Aldridge [2003] NSWADTAP 50 at [12] held (in relation to a former provision of the LTMA in the same terms): [12] Given the scheme of the Act aforementioned, it is implicit in Section 3(3)(b) that the time at which the Chief Commissioner must be satisfied that the land is used and occupied by the owner as the owner's principal place of residence must be as at midnight on the thirty-first day of December immediately preceding the year for which land tax is levied (underlining added). 79Further at [26] the Appeal Panel explained: ...Section 3(3)(b) of the Act does not confer a true discretion on the Chief Commissioner. If the evidence of the factual circumstances supports that a particular parcel of land or a flat is used and occupied by a person as the person's principal place of residence (as defined in Section 3(1) of the Act) as at midnight on 31 December in a particular year, the Chief Commissioner must be satisfied of that fact. If the factual circumstances do not support that a particular parcel of land or a flat is used and occupied by the person as the person's principal place of residence as at midnight on 31 December in a particular year, the Chief Commissioner cannot be satisfied of that fact. 80Thus, in the present case, if the evidence of the factual circumstances is such that it supports that the Caringbah property was the principal place of residence of the Applicant as at midnight on 31 December 2008, then clause 2(2)(b) of Schedule 1A will be satisfied and the Tribunal must also be so satisfied.

Principal place of residence 81The definition of "principal place of residence" in section 3 LTMA acknowledges that a person may reside at more than one place during the relevant land tax years. It provides that only one of those places however can constitute the "principal" place of residence: Aronstan v Chief Commissioner of State Revenue [2008] NSWADT 8; Chief Commissioner of State Revenue v Paspaley [2008] NSWCA 184 at [19], Chief Commissioner of State Revenue v Mesiti [2003] NSWADTAP 56 at [37]; Carey v Chief Commissioner of State Revenue [2010] NSWADT 78. 82In Chief Commissioner of State Revenue (RD) v McIlroy [2009] NSWADTAP 21, the Appeal Panel at [44] set out a useful summary of factors that might be considered in relation to this matter as originally referred to in CCSR v Ferrington [2004] NSWADTAP 41, albeit in the context of the First Home Owner Grant Act 2000: The factors referred to in Ferrington have been widely adopted in decisions under the First Home Owner Grant 2001. They may be summarised as follows (at [42], with dot points added for clarity and case references removed for ease of reading):- ..First, the words "principal place of residence" should be given their ordinary meaning in the context in which they appear ... Thus the Commissioner's reference to the provisions of the Land Tax Management Act 1956 is of no assistance. Secondly, consideration of whether a person has been residing or occupying premises as their principal place of residence is to be assessed objectively, in the light of the circumstances relating to the actual occupation of the dwelling ... Thirdly, the intention of the person concerned, gauged objectively, is relevant but not determinative of the issue ... Fourthly, to occupy a home as 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 is occupation for some other purpose ... Fifthly, the short length of a person's residence, while relevant, is not determinative of the issue. ... This is so since a recipient's occupation of a home, while short, may have the requisite degree of permanence to it. But that will not happen if, when considered objectively, the occupation was transient, temporary, contingent or of a passing nature, or for some other purpose. One may occupy premises for a short time on a transient, temporary, or contingent basis, but one can also occupy for a short time as one's principal place of residence. It is the nature of that occupation which provides the element of permanence. The fact that a period of actual occupation is short, as in the present case, will in practice make it harder for a recipient to show that the occupation was as his or her principal place of residence, but it will not make it impossible .... Sixthly, the reasons for a person's departure from the home must be both reasonable and adequately explained when considered objectively in the light of their personal circumstances ... In Bates the Tribunal said that "whether the reasons for not residing at the property were as a result of matters entirely out of the control of the applicant" was a factor to be considered. While that is undoubtedly correct, it should not be read as stipulating a requirement that the reasons for departure must be entirely out of that person's control. The facts in Gaines illustrate that there are circumstances, peculiar to the individual concerned, which may, objectively viewed, adequately and reasonably explain a person's decision to move out of a property, but which are not entirely out of the person's control. 45 Because the Appeal Panel in Ferrington was reviewing a decision made under the First Home Owner Grant 2001, it did not consider it appropriate to adopt the meaning of the words "principal place of residence" as used in the Land Tax Management Act . However, this Appeal Panel considers that the factors in Ferrington , while not formulated for applying the specific legislation relevant here, are nevertheless of assistance in construing that legislation. They are not necessarily determinative, and do not displace the developed case law on the meaning of the phrase where it is used in the Land Tax Management Act. 83In Carey v Chief Commissioner of State Revenue [2010] NSWADT 78, Judicial Member Perrignon usefully summarised some other authorities in relation to "principal place of residence": The word 'principal' is not defined in the Act. Construed in accordance with its ordinary meaning, it denotes the 'primary' or 'main' residence. Among the meanings ascribed to it in The Macquarie Online Dictionary are: 'first or highest in rank, importance, value, etc; chief; foremost'. 31 The question as to which of two or more residences is the 'principal' one is to be determined objectively, having regard to the extent and quality of its use and occupation: Cameron v Chief Commissioner of State Revenue [2009] NSWADT 64 at [46]. The issue has been described as one of 'fact and degree': Downie v Chief Commissioner of State Revenue [2003] NSWADT 233 at [26]. The respective amounts of time which the taxpayer spends in each residence is a relevant factor: Chief Commissioner of State Revenue v McIlroy [2009] NSWADTAP 21 at [41]. 84The Respondent usefully referred in submissions to a number of principles to be derived from the decided cases as to the objective factors that might be taken into account as follows: a. the amount of time that the residence is occupied and the pattern of occupation ( McIlroy (supra) at [46]-[47]); b. the listing of the address of the person, for official purposes such as on a licence or on an electoral roll (although it is noted by the Tribunal that these are not necessarily conclusive evidence that the address is the principal place of residence) ( Chief Commissioner of State Revenue v Mesiti [2003] NSWADTAP at [50], McIlroy (supra) at [47].) c. respective rights in respect of the two properties ( Mesiti (supra) at [61]). d. relative location of clothing, furniture and possessions ( Mesiti (supra) at [61]; Yen-Cheng Chuang v Chief Commissioner of State Revenue [2009] NSWADT 160 at [21]). e. where family members reside ( Mesiti (supra) at [61], McIlroy (supra) at [46]). f. the strength of ties and connection with the residence ( Mesiti (supra) at [61], McIlroy (supra) at [46]). g. utilities usage ( Tobin v Chief Commissioner of State Revenue [2009] NSWADT 188 at [49], Yen Cheng (supra) at [21]. h. the address to which bills are sent ( Tobin (supra) at [48]). i. the nature of insurance held for each property ( Tobin (supra) at [18]). j. where the person eats, drinks and sleeps ( Yen-Cheng ( supra ) at [19]-[21]). k. where a person entertains friends ( Yen Cheng (supra) at [21]). 85Having regard firstly to the matters mentioned in Ferrington's case (supra) and assessing the evidence before it, the Tribunal notes the following: a. The subjective evidence of the Applicant that he intended to and indeed did move into the Caringbah property and live in it as his principal place of residence between the long weekend in October 2008 and 31 December 2008 is relevant but does not determine the issue. The evidence as to the actual occupation of the Caringbah property must be examined in order to assess, objectively, whether or not that property was the principal place of residence of the Applicant. b. The Tribunal notes firstly that the evidence was that the Applicant's residence of the Caringbah property was reasonably short (i.e. less than 3 months). This does not, of itself, however necessarily mean that that property was not the principal place of residence of the Applicant. Indeed in some of the decided cases, a shorter period than 3 months has been sufficient having regard to all the facts and circumstances. c. Secondly, the Applicant's own evidence was that significant amounts of time continued to be spent by the Applicant in the Cronulla property during the above three month period. The Applicant said that his usual routine was to visit the Cronulla property most days after work feeding the cats (which he explained were not pets but essentially adopted stray cats), to work on the house at Cronulla, (by painting and redecorating it) and then to work in his studio at night as well as working on weekends. The Applicant said that he worked very late at night and indeed in the early hours of the morning on his screen plays at the Cronulla property whilst he was suffering from insomnia. He would then drive to the Caringbah property to try to sleep before getting up for work and would follow the same procedure the next night etc. Whilst this evidence appeared to the Tribunal to be adduced in order to account for the use of electricity at the Cronulla property (in the invoices that had been summonsed by the Respondent discussed further below), it did seem to establish that the Applicant continued to spend the majority of his "non-working" time at the Cronulla property rather than the Caringbah property. This does not, of course, conclusively demonstrate that the Cronulla property was his principal place of residence rather than Caringbah, but it can be taken into account in all the circumstances as a strong indication that his principal place of residence continued to be in Cronulla ( Chief Commissioner of State Revenue v Mesiti [2003] NSWADTAP 57 at [57]). d. Third, the occupation of the Caringbah property during the above three month period appears to have had something of a "contingent" nature about it in so far as the Applicant's evidence was that one of his properties would ultimately have to be sold to pay his outstanding land tax bill. The occupation of the Caringbah property (whilst "redecorating" the Cronulla property) was a course decided upon by the Applicant in case the Caringbah property could not be sold - the market for waterfront properties having recently slumped. If the Caringbah property could not be sold then the Applicant said that the Cronulla property might be sold instead. For the first time in cross-examination, the Applicant claimed there was a third option of obtaining a line of credit from his family trust. This option was not referred to in his original evidence. There was no other evidence about the nature of the trust and/or line of credit that might have been available. As it turned out, contracts for sale were exchanged in relation to the Caringbah property during the 3 month period on 5 December 2008 (i.e. only 2 months, 1 week after the Applicant moved in). In assessing the Applicant's evidence, it appeared to the Tribunal that the occupation of the Caringbah property was brought about for the contingent / temporary purpose of keeping the Applicant's options open depending on what occurred with the property market and the Global Financial Crisis rather than as a result of any conscious choice by him to permanently "relinquish" the Cronulla property as his principal place of residence and to instead adopt the Caringbah property as his permanent principal place of residence ( Mc Nally & Anor v Chief Commissioner of State Revenue (NSW) 2004 ATC 4007 per Gzell J). e. Fourth, it appears from the since 4 August 2008 (i.e. during the entire time that the Applicant said he was living at the Caringbah property) there was in existence an exclusive agency agreement with Abode Property Agents for the sale of the Caringbah property. The Applicant agreed in cross-examination that he had signed the agreement and that it super-ceded any prior agency agreements. It was clear that the Caringbah property was advertised for sale during the relevant three month period and could potentially be sold at any time. The Applicant agreed in cross-examination that there were no advertisements for the Cronulla property in the same period. The Tribunal infers from the evidence that during the three month period, the primary motivation of the Applicant remained to sell the Caringbah property and his occupation of it was for the temporary purpose of redecorating the Cronulla property in order to "keep his options open" rather than any adoption of the Caringbah property as his permanent principal place of residence. f. By 5 December 2008, contracts had been exchanged for the sale of the Caringbah property with settlement to occur in January 2009. Accordingly, at the particular point in time that the Tribunal must consider (i.e. midnight on 31 December 2008) a reasonable person would likely consider that the use and occupation of the Caringbah property as a place of residence would now be "temporary", that is, until such time as settlement of the sale contract that was expected to occur in mid-January 2009. 86In terms of the matters listed at paragraph REF _Ref289167128 \r \h The Respondent usefully referred in submissions to a number of principles to be derived from the decided cases as to the objective factors that might be taken into account as follows: that arise from other decided cases in this area, the Tribunal notes the following emerged from the evidence: a. In relation to the amount of time that the residence is occupied and the pattern of occupation, on the basis of the Applicant's own evidence the occupation was for a 3 month period and his routine was to spend the majority of his "non-working" time at the Cronulla property. The Applicant said in his witness statement that he slept at the Caringbah property and had all his meals there. It is unclear to the Tribunal as to how he could have had his dinner there every night in light of his other evidence that his usual pattern was to return to the Cronulla property each day after work to feed the cats, work on the house and then write his screen plays into the evening (sometimes until the early hours of the morning) and then drive home. This was not clearly explained by the Applicant. The Tribunal notes other decided cases in this area that have held that merely sleeping at a property does not make the property a "principal place of residence". b. The Applicant did not change the listing of his address on the electoral roll when he moved into the Caringbah property (although it is noted that this is not necessarily conclusive evidence that the address that does appear is the principal place of residence). The Applicant explained that both the Caringbah and Cronulla properties were in the seat of Cook and no election was imminent and this was the reason that no change was made. The Tribunal has taken into account this matter but has not placed considerable weight upon it in light of the Applicant's explanation. c. In relation to the Applicant's driver's licence (which showed the Caringbah property as his address), he explained that he had resided at the Caringbah property during January-June 2005 and at that time had renewed his licence for 5 years, which period covered the three month period in question. The Applicant admitted in cross-examination that he did not update his records to show that he had moved back to the Cronulla property after June 2005 and resided there until October 2008. Accordingly, in light of this evidence, the Tribunal has not placed a great amount of weight on the fact that the licence showed the Caringbah property as his residential address in the period from October 2008 to 31 December 2008. c. In relation to the Applicant's respective rights in respect of the two properties, these appeared to be largely the same in that the evidence showed that he had continuous control and possession of both properties during the 3 month period and as at 31 December 2008. The Applicant's evidence was that some of the bedrooms in the Cronulla property (it is noted that his evidence did not extend to "all" of the bedrooms) could not be used/occupied during the three month period due to a "bowing" of the walls that had occurred. The Tribunal notes that there was no evidence to the effect that the bathrooms and kitchen of the Cronulla property could not and were not used/occupied during the 3 month period. The Tribunal infers that these rooms, together with any bedrooms not affected by the "bowing" of walls and the studio were capable of being used by the Applicant during the 3 month period in question and were so used during the same period. d. In relation to the relative location of clothing, furniture and other possessions, the Applicant's evidence was that from the time of the long weekend his furniture and personal effects were located at the Caringbah property. The items in his studio at Cronulla were not moved (the Applicant explained this was because he was too busy to relocate it as he had too many other jobs and could not afford the interruption to his work but that he had intended to do so during the Christmas break (presumably in 2008). The evidence of Mr Richardson was that he helped the Applicant move out "outdoor cupboards and other furniture". He could not categorically recall if there were "personal affects" (sic) and the nature of these nor that they were owned by the Applicant. Mr Richardson did not provide any specific corroborative evidence that the Applicant's bed, clothes, personal items etc. were at the Caringbah property as at 31 December 2008 (or indeed before or after this). Although it was in his power to do so (and was questioned by the Respondent) the Applicant did not explain the specific nature of the items that he said he moved from Cronulla to Caringbah in October 2008. f. From the evidence, it appeared that the Applicant had strength of ties and connection to both the Caringbah and Cronulla properties. The evidence was that he had resided at the Caringbah property at various times since 1997 including in 1997 and 1998 and from January to June 2005. The more recent ties of the Applicant were of course to the Cronulla property, which he lived in until the October long weekend in 2008 and then returned to live in January 2009. The ties to the Cronulla property continued in the relevant three month period in so far as the Applicant retained his writing studio there and spent significant amounts of time there as already discussed above. g. In relation to utilities usage, the Tribunal notes that the electricity usage for the Cronulla property for the 3 month period in question was generally consistent with the quarters before and after. This is consistent with not much having changed in terms of the Applicant's general routine. He was still spending the majority of his non-working time at the Cronulla property. It seems clear that the Applicant did spend time at the Caringbah property in the 3 month period but the electricity bills were significantly less than the Cronulla property. This is also consistent with the Applicant spending more of his non-working time at the Cronulla property. In relation to water usage, there is clearly a very large discrepancy in water usage between the Caringbah and Cronulla properties in the relevant period. The Tribunal does not consider the explanation as to differing garden watering between the two properties and the hosing down of the fibro walls at the Cronulla property provides a complete explanation for the discrepancy. The water usage invoice for 20 August 2008-24 November 2008 (where for at least 6 weeks the Applicant says he was residing in the Caringbah property as his principal place of residence) was $1.61 and 1 kL of water was used. By contrast, the water usage at Cronulla remained broadly the same between October 2008-December 2008 as it had been in quarters before and after. h. In respect of the address to which bills were sent, it is noted that some of the utilities bills for the Caringbah property were sent to the Applicant's post office box in Cronulla. The Tribunal accepts the explanation of the Applicant that there were concerns over these bills being sent to the Caringbah address due to the situation between the tenant and the Applicant. i. In the cross-examination by the Respondent's counsel, the Applicant, when confronted with a copy of the insurance policy for the Caringbah property (which premium was paid on 8 October 2008 at a time when the Applicant was living at the Caringbah property) was forced to concede that he had paid a premium for "Landlord's Fixtures and Fittings". As highlighted in cross-examination, this was somewhat inconsistent with the property being the "home" of the Applicant as opposed to a rental property at that time. The Applicant said that he had not paid any particular attention to this and thought that the premium would be the same anyway. Nevertheless, he conceded to the cross-examiner that he was aware of his duty of utmost good faith to the relevant insurer. A further matter that was the subject of similar cross-examination was a letter that the Applicant had written to the CTTT on or about 15 April 2010. In that letter the Applicant represented to the CTTT that the tenant had only vacated the premises on 17 June 2008 and the premises were "damaged and full of junk that took months to clean out and repair; during this time the property could not be re-let and substantial loss was incurred. I need to claim the costs of cleaning the property and the loss time when it could not be rented due to the damaged and filthy state it was left in". As highlighted in cross-examination, the claims in this letter were somewhat inconsistent with the case advanced by the Applicant in the Tribunal, that is, at all times after the tenant vacated, the Applicant intended to move into the property to live in it as his principal place of residence but was prevented from doing so due to the state that the tenant left the property in. It was not part of the Applicant's case before the Tribunal that he was precluded from "renting" the Caringbah property during the above period. Instead the case was that the state of the property meant that the Applicant could not move into the Caringbah property as soon as he wanted. In other words, the "loss" to him (if any) was the cost of him continuing to reside at Cronulla for a longer period as opposed to the "loss" claimed in the letter of lost rental income for the Caringbah property. The Tribunal did not find the explanation from the Applicant (that is, the "impost" as far as the CTTT was concerned was only that the property could not be re-let or occupied) as particularly compelling in the circumstances. j. The Applicant's evidence was that he slept at the Caringbah property and had his meals there. In further evidence, it was clarified that the Applicant had his lunch on weekdays at the office and he also had a liquid breakfast. The Tribunal has already explained its difficulty in accepting the evidence of the Applicant that all evening meals were had at the Caringbah property in light of the Applicant's other evidence that he spent most days after work at the Cronulla property where he remained until late at night and early in the morning working on his screen plays. The Tribunal has also already explained above its reasons for its conclusion that not all bedrooms were unable to be occupied at the Cronulla property and there was no evidence that the kitchen and bathroom could not and were not used by the Applicant during the above period. On the evidence that was before it, the Tribunal has drawn the inference that the Applicant continued to have some meals at the Cronulla property and most likely slept there on some occasions when he was working very late at night and early into the morning on his screen plays. k. In relation to the relevant place where the Applicant entertained friends, there was no evidence before the Tribunal from the Applicant himself. The Applicant was clearly best placed to either give this evidence himself or to call other witnesses to do so. He did not do this and the Tribunal is therefore placed in the position to consider the evidence before it and to draw inferences from it. In cross-examination, the Respondent's Counsel asked his friend Mr Richardson where he had met with the Applicant and the Tribunal notes that Mr Richardson replied immediately and without hesitation that it was at the Cronulla property. The Tribunal has taken this evidence into account in relation to assessing the "main" residence of the Applicant as at 31 December 2008. 87The Applicant cited a judgement of the Land Court of Queensland in Jackman v Commissioner of Land Tax [2010] QLC 3 (per Member RS Jones) that he said supported his case. 88In that case, the Land Court examined the case of Mr and Mrs Jackman who owned a property in Hedges Avenue at Mermaid Beach which had, up until the relevant land tax year (i.e. the 2008 year), been their principal place of residence. In May 2007, the Jackmans entered into a construction contract in respect of refurbishment and renovation of the Hedges Avenue property. 89For a short period of time the Jackmans resided in the Hedges Avenue property but this soon became impracticable and uncomfortable. By July 2007 the Jackmans split their living arrangements between the Hedges Avenue property and another property they owned (and referred to in the case as the "Blue House"). Personal items were moved to the Blue House and by August 2007, they were spending more time at the Blue House than at Hedges Avenue. 90Sometime between August and September 2007, the Jackmans decided that the Blue House was not suitable accommodation. They went on a holiday and returned and entered into a tenancy of another property (referred to in the case as "La Sabia"). It commenced on 31 October 2007 and expired on 31 April 2008. The Jackmans remained in occupation of La Sabia following the expiry of the tenancy until the renovations of the Hedges Avenue property were complete in November 2008 (i.e. after the end of the 2008 land tax year). 91In that case it was conceded by Counsel for the Jackmans at [18] that section 3E(1)(a) of the Land Tax Act 1915 (being the equivalent provision to clause 2(2)(a) of the LTMA) could not be satisfied and the Jackmans could only rely on section 3E(1)(b) (being he equivalent provision to clause 2(2)(b) LTMA). It is clear that this was because the Jackmans did not use the Hedges Avenue property continuously for a 6 month period prior to 30 June 2008. The same result occurs in the present case because the Applicant did not continuously use and occupy the Caringbah property from 1 July 2008 to 31 December 2008. 92In relation to the application of section 3E(1)(b), the Member took account of the subjective evidence of the Jackmans that they always considered the Hedges Avenue property to be their "home" and the other places as temporary accommodation. They did not part with physical possession and control of the Hedges Avenue property and that address remained their mailing address and address for the electoral roll. 93In the present case, the Tribunal notes that on balance the evidence was to the effect that Caringbah property was accommodation for the Applicant whilst the Cronulla property was redecorated and was contingent on whether or not the Caringbah property was sold. The Applicant likewise did not part with physical control or possession of the Cronulla property at any time and indeed, unlike the Jackmans, continued to spend large amounts of his time there. The Cronulla property remained the mailing address for utilities/water for that property as well as the Applicant's address on the electoral roll. 94In the Jackman decision, the Member took account of the fact that the land telephone lines were still kept connected at the Hedges Avenue property. There was no evidence of a similar nature in the present case so the Tribunal cannot make similar findings. 95The Tribunal in considering the decision of Jackman has concluded that (although it is not binding on the Tribunal) it is consistent with the view that has been reached in the present case, that is, that the Cronulla property remained the principal place of residence of the Applicant as at 31 December 2008 and the residence at Caringbah was both temporary and contingent on whether and how quickly that property sold to a buyer. 96In considering all of the abovementioned factors, the Tribunal has concluded that the Applicant's principal or "main" place of residence as at 31 December 2008 was the Cronulla property. 97The Cronulla property was indisputably the principal place of residence of the Applicant up to October 2008 and, on the evidence before it, the Tribunal has concluded that the Applicant did not "relinquish" this property as his principal place of residence and adopt the Caringbah property in its stead. His strength of ties and connection to the Cronulla property remained strong throughout October 2008 to 31 December 2008 and the evidence indicated that he continued to spend most of his non-working time at the Cronulla property. The Applicant's occupation of the Caringbah property appeared on balance to be for the temporary purpose of re-decorating the Cronulla property in order to keep his options open whilst all the time the Caringbah property was on the market to be sold. This conclusion is supported by a consideration of all the factors above including the relatively unchanged electricity and water usage at the Cronulla property and the significantly lower water usage at the Caringbah property in one of the invoices mentioned above.

Part G - Order 98For the reasons expressed above, the Tribunal makes the following order:

1. The decision of the Respondent is affirmed.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 01 April 2011