1

This is an application to review a decision of the respondent made 12 March 2003 (the decision) to reverse an earlier decision to pay the applicant a first home owner's grant and require repayment of the grant being $7000. The home owner's grant was paid to the applicant in respect of a purchase of a property known as and situated at 39 Halsbury Street, Glenroy, Victoria (the property).

2

The stated reason for the decision was as follows :

Based on the information you have voluntarily provided, it has been found that you did not meet the residency requirement contained in section 12 of the First Home Owner's Grant Act 2000 ('the Act'). This is due to the fact that you did not occupy the purchased property as your principal place of residence within 12 months of becoming entitled to possession of the property.

3

The applicant objected to the decision, which objection was disallowed by Notice of Determination dated 15 October 2003. The reason for the disallowance of the objection was :

(a)

acquire a relevant interest in the property at 39 Halsbury Street, Glenroy as required by section 5 of the First Home Owner Act 2000; and/or

(b)

meet the residency requirement in section 12 of the Act.

4

At the commencement of the hearing, Ms Orr, counsel for the respondent, stated that the respondent was no longer relying on ground (a) referred to in the determination of the objection. Therefore, the only ground that the respondent relied upon at the hearing before me was that the applicant did not meet the residency requirement referred to in s 12 of the Act.

5

By a contract of sale dated 20 August 2000, Stephen John Boots (the applicant's uncle) and/or nominee purchased the property for a purchase price of $130,000. Subsequently, Stephen John Boots nominated the applicant as the purchaser of the property.

6

By an application dated 18 October 2000, the applicant applied for a first home owner's grant in relation to the purchase of the property.

7

By a transfer dated 19 October 2000, the property was transferred to the applicant for a consideration of $130,000 and the applicant became registered proprietor on Certificate of Title on 23 October 2000.

8

The applicant alleges she moved into the property with her belongings, on 19 October 2000. The applicant further alleges that, at the time of purchase and subsequent thereto, she had an arrangement with her cousin Emily Culhane that she would share the residency of the property with her. Both the applicant and Ms Culhane gave evidence that the basis of the sharing arrangement was to be that Ms Culhane would pay the applicant the sum of $80 to $100 per week by way of rent and there was some uncertainty about the household bills and the cost of food.

9

Both the applicant and Ms Culhane gave evidence that the arrangement that was made between them broke down on the day before the applicant was due to move into the premises. The reason that the arrangement broke down was that Ms Culhane's mother, who was suffering from multiple sclerosis, became ill and needed her attention.

10

As a result, the applicant alleges she moved into the premises by herself on 19 October 2000.

11

The evidence of the applicant and her witnesses as to the financing of the purchase of the property was as follows :

a

The applicant approached her uncle Stephen who agreed to finance her to purchase the property. In order to obtain the finance, the applicant's father gave the applicant a gift of $10,000 to help purchase the property, which money was paid directly to the applicant's uncle Stephen. The applicant's uncle Stephen then borrowed from his sister, the applicant's aunty Brenda Boots the sum of $120,000. Thus the whole of the purchase price was obtained by this method.

b

The first home owner's grant of $7000 was paid into the bank account of Stephen Boots who used half that money ($3500) to pay for the stamp duty on the property. The balance of the money was used to reduce the applicant's debt to him.

c

The day the applicant moved into the property, work was commenced by the applicant's uncle Stephen to clean the premises, fix and renew a number of items at a cost of $6000. Stephen did not charge for his labour. Stephen first gave evidence that the labour to fix the items took one week. However, he then changed that to 5 days. However, the applicant gave evidence that the labour took 2 weeks. Thus, after the payment of the $6000, and taking into account the first home owner's grant, the applicant's debt to her uncle increased to $122,500.

d

The applicant agreed to repay the loan to her uncle in the sum of $150 per week over 15 years. The applicant and her uncle Stephen gave evidence that the $150 per week was paid by the applicant to her uncle from the time that the applicant moved into the premises to the time she moved out on 2 February 2001. The applicant's uncle gave evidence that he did not expect to have to borrow the money from his sister Brenda for any longer than two to three years because, at that time, he believed the applicant would obtain a loan from a bank or other financial institution and thus repay the debt to him. However, the applicant gave evidence that she knew of no arrangement in relation to obtaining a loan from a bank or other financial institution and she expected the loan from her uncle to continue for a period of 15 years.

e

It should be noted that at the time of purchase, the applicant was working in her first job as a casual position at Australia Post. Stephen Boots gave evidence that her take home pay was $450 per week. However, the applicant gave evidence that her normal take home pay was between $750 and $800 per fortnight. However, on odd occasions she had worked sufficient hours to earn $900 per fortnight.

f

The applicant's father gave evidence that during the time that the applicant was resident in the property, he lent her sums totalling $4500.

12

It is worth noting that the work undertaken at the property by Stephen Boots included :

•

removing a number of trailer loads full of rubbish

•

installing a new gas hot water service

•

installing a new sink

•

installing a second hand stove

•

installing new lights and new light globe

•

fixing broken windows and glass

•

fixing kitchen cupboard

•

fixing tap

•

fixing garage door

•

replacing downpipe

•

fixing rotting posts

13

The applicant gave evidence that, subsequent to moving into the property, she was so distressed that the following day she attended the office of Barry Plant Doherty Real Estate in Glenroy, and signed an "exclusive sale of property" with that agent. The sale price referred to in the authority was the sum of $162,000. The applicant stated that the next day after signing the authority, she was sorry she had signed the same because she realised that she could in fact meet the expenses of the house without the help of her cousin. However, in spite of giving this evidence, the applicant did not contact the real estate agent and request to be released from the exclusive authority. Further, the applicant ultimately, on 1 December 2000, accepted an offer for the property of $158,000. I find it highly improbable that any person wishing to be relieved from an exclusive sale authority would not make such a request of the real estate agent to whom the authority was given. I find it even more improbable that a person in the applicant's position, who stated that she did not really want to sell the property, but felt bound by the contract with the estate agent, would accept an offer of some $4000 less for the property than stated in the exclusive sale authority. The applicant tried to explain these matters by stating that she felt bound by the contract. I find that explanation difficult to accept because she failed to contact the agent and request to be excused from the obligations under the exclusive sale authority and ultimately accepted a price less than that contained in the exclusive sale authority.

14

As previously mentioned, the applicant's uncle stated in his evidence that he did not know that the applicant had decided to sell the property while he was performing the work at the premises. The applicant's uncle did admit that he did the conveyancing for both the purchase and the sale of the property and that he prepared the statement pursuant to s 32 of the Sale of Land Act 1962. When it was pointed out to Mr Stephen Boots that the s 32 statement was signed by the applicant on 24 October 2000 (5 days after the applicant moved into the property), he then stated that he always thought of a week as being five days. When I pointed out to him that in the year 2000, the 19th October was a Thursday and the 24th October was a Tuesday, he then did not seem to have an explanation for his statement that a week was five days. The applicant's uncle's evidence that he did not know that his niece was selling the property while he was performing the work became more improbable when the applicant gave evidence that the work that her uncle performed on the property took approximately two weeks. In my view, looking at the work that was performed on the property by Stephen Boots, it is likely that it did in fact take two weeks. Thus, I conclude that Stephen Boots was not being forthright when he stated that when he was performing the work at the applicant's property he did not know that the applicant was offering the property for sale.

15

The respondent relied on a number of utility bills in relation to the property in support of its contention that the applicant had not fulfilled the residency requirement of s 12. Those bills are as follows :

a invoice for gas for period 19 October 2000 to 22 December 2000 issued for the amount of $44.05;

b invoice for water for the period 8 November 2000 to February 20001, issued for the amount of $20.11 (actual usage $10);

c invoice for electricity for the period 19 October 2000 to 21 December 2000 issued for the amount of $72.03; and 21 December 2000 to 29 January 2001 for the amount of $31.45 (actual usage being $14.15).

16

By letter 29 May 2003, the respondent requested the applicant to provide certain information including, "details of how the purchase of the Glenroy property was financed?". In answer to that question, the applicant stated : "due to having just started work, I borrowed the full purchase amount from my uncle, at 0% interest payable at $150.00 per week over @ 15 years. This agreement was verbal".

17

Subsequently, as previously mentioned, the applicant entered into a contract of sale for the property at a purchase price of $158,000.

18

The applicant's uncle Stephen Boots gave evidence that the purchase price was distributed as follows :

•

$4000 in relation to agent's commission

•

$11,000 paid to Allison Hurley, a former partner of Stephen Boots, to whom Stephen Boots owned money

•

the balance of $141,939.51 was paid into the bank account of Brenda boots (the applicant's aunty). Stephen Boots said that the reason the money was paid into the bank account of Brenda Boots was to save double account fees. He stated that the break-up of that money was to be, $120,00 for the repayment of the loan from Brenda Boots to Stephen Boots. The balance of the money was to pay for a property which Stephen Boots was purchasing from Brenda Boots.

19

Stephen Boots then gave evidence that the profit that the applicant made on the property which he stated to be $34,000 was paid to the applicant's father over a number of years, so that the applicant's father could invest that profit for the applicant. The applicant agreed with this evidence as did her father. However, simple calculations suggest that the profit that the applicant made on the property was something less than $34,000. In final address, Mr Stephen Boots explained this sum as taking into account the applicant's father's contribution less the agent's commission.

20

The applicant subsequently moved out of the property on 2 February 2001. She first moved into her father's home, but has subsequently taken her own residence which she rents at a rent of $200 per week.

21

The relevant legislation in regard to this matter is contained in s 1 and 12 of the First Home Owner Grant Act 2000. Those sections at the relevant time read as follows :

The purpose of this Act is to encourage and assist home ownership, and to offset the effect of the GST on home ownership, by establishing a scheme for the payment of grants to first home owners.

(1) An applicant for a first home owner grant must occupy 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 a longer period approved by the Commissioner.

(2) The Commissioner may exempt an applicant (the "non-complying applicant") from the residence requirement if-

(a) the applicant is 1 of 2 or more joint applicants for a first home owner grant; and

(b) at least 1 of the applicants complies with the residence requirement; and

(c) there are, in the Commissioner's opinion, good reasons to exempt the non-complying applicant from the residence requirement.

22

Thus the question to be asked in this proceeding is whether the applicant occupied the property as "her principal place of residence".

23

The submissions of the applicant and the respondent are diametrically opposed.

24

The applicant submits that at all times prior to her visit to the estate agent on 20 October 2002, she intended to occupy the property as her principal place of residence and that she did in fact occupy the property as her principal place of residence from 19 October 2000 until 2 February 2001.

25

On the other hand, the respondent submitted that the applicant did not occupy the property as her principal place of residence, nor did she ever intend to occupy the property as her principal place of residence.

26

In Verheyen v Chief Commissioner of State Revenue (2004) NSWADT 19, Judicial Member Mr Montgomery of the Administrative Decisions Tribunal New South Wales found in relation to similar requirements in that State's legislation that the requirement for residence is a mandatory obligation and a failure to comply means that the decision to award the grant cannot stand (see paras 23-26).

27

The words "occupy" and "principal place of residence" are not defined in the Act. However, they have been the subject of discussion in numerous cases determined under the New South Wales provision which is similar to the Victorian Act. In Bates v Commissioner of State Revenue (2004) NSWADT 13, Judicial Member Higgins, after referring to relevant authorities, including Council of the City of Newcastle v Royal Newcastle Hospital [1957] HCA 15; (1956) 96 CLR 493, Dean v Commissioner of Stamp Duties [1996] 2 QdR 557 and Re Newman and the Commissioner for ACT Revenue (1993) 26 ATR 1379, stated as follows :

(a)

The terms 'occupy' and 'principal place of residence' should be given their ordinary meaning having regard to the objects and purposes of the Act. That purpose being similar to the abovementioned tax rating cases in that the legislative scheme of the Act is to provide first home owners some relief towards the cost of purchasing their first home. Accordingly, in the context of this Act, in my opinion, 'occupy' means to reside in the property. However, that residence must also be such that it is the person's 'principal' place of residence or to use the terms of the title of the legislation, the persons 'home'. This in my opinion, requires the occupation to be ongoing and involves an element of permanence;

(b)

Whether an applicant has 'occupied' the property as his/her 'principal place of residence', as prescribed under the Act, is a question of fact that is to be assessed objectively having regard to all the circumstances. The intention of the applicant is relevant but it is not determinative of the issue. Nor is the fact that the applicant resided in the property for a short period of time during the relevant period. These matters, if established, must be considered in light of all the evidence including, where the applicant resided otherwise during the relevant period, the reasons given by the applicant for not residing or continuing to reside at the property, whether the reasons for not residing at the property were as a result of matters entirely out of the control of the applicant and the nature of the applicant's residence at the property. This list is by no means exhaustive as each case must be considered in the context of its own particular facts. (underlining supplied).

28

The principles referred to by Judicial Member Higgins in Bates' cases have been referred to and applied by this Tribunal in Calia v Commissioner of State Revenue [2004 VCAT 756] and Guthrie v Commissioner of State Revenue [2004 VCAT 2009].

29

In Ferrington v Chief Commissioner of State Revenue [2004] NSWADTAP 41 Member Needham sitting in the Administrative Decisions Tribunal New South Wales outlined six common principles that she considered emerged from the cases in relation to the construction of the term "principal place of residence". The six principles which the member adopted and with which I agree are as follows :

•

the term should be given its ordinary meaning in the context in which it appeared;

•

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;

•

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

•

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;

•

the short length of a person's residence, while relevant, is not determinative of the issue, as a short period of occupation may still have the requisite degree of permanence to it; although the fact that a period of actual occupation is short will make it harder to satisfy the requirement; and

•

the reason for a person's departure from the home must be both reasonably and adequately explained when considering objectively in the light of the person's personal circumstances.

WHETHER THE APPLICANT FULFILLS THE CRITERIA OF OCCUPYING THE PROPERTY AS HER PERMANENT RESIDENCE

30

On the documents supplied by the applicant, the respondent has submitted that the applicant's connection with the property is properly described as transient, temporary, contingent or a passing nature. In support of this submission, Ms Orr referred to the short period of the applicant's occupancy (15 weeks), the fact that the applicant was not a party to the original contract, the fact that the first home owner's grant was paid into Stephen Boots' account rather than the applicant's account. Ms Orr stated that the most compelling fact of all was that the day after the applicant moved into the premises, she engaged a real estate agent to sell the property which sale took place some six weeks later. I agree with Ms Orr that the matters to which she referred are of considerable concern and cast serious bona fides on both the applicant and her uncle Stephen Boots in relation to the applicant's stated intention that she intended to reside in the premises.

31

Further doubt is thrown on the applicant's bona fides and genuineness, when one examines the evidence that was presented before me during the hearing.

32

I have already referred to the variations in Stephen Boots' evidence as to the period in which he worked at the premises. His own evidence initially said it was a week but then it was reduced to five days. The applicant's evidence was it was a couple of weeks.

33

In relation to the applicant's savings at the time the property was purchased, Stephen Boots said that the applicant had savings of $2000. Later, he suggested that the applicant did not have savings or he did not know of her savings. On the other hand, the applicant gave evidence that she had savings of approximately $3000 and she offered them to Stephen Boots, but he declined that offer and told her to keep them for expenses.

34

The applicant appears to have had a lack of meaningful involvement in the key stages of acquisition of the property. She relied almost entirely on Stephen Boots to find her the property, who found it by making enquiries and it was found by a "friend of a friend". The applicant gave evidence that prior to purchasing this property, she had not inspected any other house, although she had made inquiries from real estate agents and looked in the paper.

35

The applicant was heavily reliant on Stephen Boots for funding the house and the following should be noted :

•

Stephen Boots raised the money to purchase the house

•

Stephen Boots signed the contract to purchase the house with a nominee clause. There was no reason given by the applicant or Stephen Boots as to why the applicant did not sign the contract save and except that Stephen Boots stated it was common business practice. However, given the circumstances of this case, I find it somewhat extraordinary that the applicant did not sign the contract herself. Evidence was given that she had a mobile telephone and that she owned a motor car. Under those circumstances, I infer it would have been relatively simple for Stephen Boos to ring her and ask her to come and sign the contract but that did not happen.

•

I notice that the payment of the deposit and purchase monies was arranged by Stephen Boots with the assistance of the $10,000 gift from the applicant's father. The applicant had no part in arranging the same. Further, the conveyance both for the purchase and sale of the property was done by Stephen Boots. As was the substantial works that were performed, which clearly added value to the property. The distribution of the money from the sale of property seems to have been entirely arranged by Stephen Boots to suit his purposes at the time although it seems clear that money was paid back to the applicant's father to be invested on the applicant's behalf.

36

Thus to sum up at this stage, it seems clear that the applicant had little involvement in arranging for the purchase or sale of the house, and save and except for signing the sole agency authority had little involvement in selling the house. She also had little or no say in the distribution of the proceeds from the sale of the house.

37

The complicated arrangement for the provision of purchase monies and distribution of sale monies are grounds for concern.

38

I also note the multi layered arrangement in which Stephen Boots was a key player in relation to the gathering of purchase money and distribution of sale monies. No satisfactory explanation was given in relation to those arrangements by either Stephen Boots or the applicant. For example, the applicant said that the reason the purchase monies were borrowed from Stephen Boots rather than her aunty Brenda Boots was because she did not want to ask Brenda Boots for that money. However, that does not explain why her uncle Stephen could not have asked his sister to lend the applicant the money. It seemed to me to be an unnecessary complicated arrangement without any real purpose. Similarly, paying the bulk of the proceeds of the sale money to Brenda Booth seemed unnecessarily convoluted. It was unusual, to say the least, that Stephen Booth wanted the monies paid like this in order to purchase a property from his sister Brenda.

39

There appeared to very loose arrangements in relation to the re-payment by the applicant for monies borrowed from Stephen Booth. The evidence from both the applicant and Stephen Boots was that the applicant paid Stephen Boots the sum of $150 for the entire 15 weeks that she resided in the premises. During this time, the applicant was working casually with the Post Office in her first job and earning mostly between $750 and $800 per fortnight. Both the applicant and Stephen Boots gave evidence that the $150 per week was paid regularly and without difficulty. However, it does appear that during the same period the applicant was required to borrow numerous sums of money totalling $4500 from her father. Thus, I conclude that the stated arrangement for repayment of money, gives me some doubt as to the applicant's capacity to meet that arrangement.

40

I further note, that the applicant's arrangement with her cousin Emily Culhane in relation to staying in the premises also appeared to be extremely loose. In a letter to the respondent dated 19 March 2003, the applicant wrote :

After moving in, it was my intention to have some friends rent with me to help with my repayments but unfortunately this didn't work out, and I don't feel safe renting to strangers.

41

In her oral evidence to the Tribunal, the applicant told me that it was her intention to have her cousin move in with her. If that was in fact her intention, it is surprising that she did not write the same in the letter of 19 March 2003. Further, the arrangement between the applicant and Ms Culhane appears somewhat unclear, both the applicant and Ms Culhane said that the rent was between $80 and $100 per week. It is surprising that a fixed amount was not agreed. Further, there was no agreement between the applicant and Culhane as to precisely what other expenses were to be paid. Thus, the arrangement between the applicant and Culhane did not give the impression to me that the applicant was entering into a long term commitment to be living in the property as her principal place of residence.

42

Further doubt arises in relation to the work that was carried out on the property by Stephen Boots. The work commenced the day the applicant took possession of and moved into the premises and proceeded very quickly. Whether the work took five days, one week or two weeks, is not clear. However, by the type of work that was performed, in my view, such work would be likely to take the longer rather than the shorter time, therefore I find, on the balance of probability, it took 2 weeks. There was no monetary consideration for the works other than the $6000 for materials. Stephen Boots performed the work for nothing. Stephen Boots said he performed this work by taking holidays from his employment. It would seem incredible that he would have taken sufficient time off from his employment in the categorisation as holidays, to perform this work. Further, I note that the works would have improved the desirability of the property very considerably and, as a consequence, improve the value. As a consequence, it would seem likely that these works were being performed in order to make the house ready for a sale. This is particularly so in light of the fact that the applicant placed the house on the market the day after she took possession of the same.

43

The circumstances and timing of the engagement of the real estate agent by the applicant give some reason to doubt the applicant's motive that she was intending to reside in the property as her principal place of resident. The $162,000 that the applicant put as the selling price on the exclusive sale authority seems on the applicant's evidence, to have almost been "pulled out of the air". The applicant gave evidence that this price was arrived at after she described the property and its position to the agent. It seems to me most unlikely that an agent would put a price on a residential home without first inspecting the same. I do not accept the applicant's explanation that a price was put on so quickly because she was pressurised by the agent. Further, in taking the whole circumstances of this case where the applicant had been advised and helped by her uncle, Stephen Boots, "every step of the way", it would seem highly unlikely that she would make such an important decision as selling the property without consulting Stephen Boots or somebody else who she trusted first.

44

The applicant gave evidence that after she signed the exclusive sale authority, she was sorry she had done the same and she wished to keep the property, however, her actions are not suggestive that this was her view. Most people in the position of the applicant who had changed their mind about selling the house and had signed an exclusive sale authority would immediately ring the estate agent and try and negotiate their way out of the agreement or request that the agreement be cancelled. The applicant gave evidence that she did not do either of these two things. Further, even though the applicant signed the exclusive sale authority on the basis of a purchase price of $162,000, she in fact accepted $158,000 for the property. This is in spite of the fact the applicant admitting that $4000 "was a lot of money to her". If the applicant did not want to sell the property, one can only be left to guess why she would have accepted $158,000 for the sale price of the same. The applicant herself gave no satisfactory reason.

45

Taking all these matters into account, I conclude that the applicant did not intend and in fact did not occupy the property as her principal place of residence. On the contrary, in my view, taking the evidence as a whole, I find on the balance of probabilities, that the applicant purchased the property not for the purpose of making a home for herself but for the purpose of an investment and quick sale with a profit, which is exactly what happened. Her occupation was a stopgap measure, before the property was sold, that is, the occupation was not ongoing or permanent (see Bates' case). In the circumstances of the legislation, in my view, this is insufficient to show that she was not occupying the property as her principal place of residence. The occupation was nothing more than transitory. Looking at the objective factors that I have referred to above concerning this matter, in my view, no reasonable Tribunal could come to the conclusion, on the balance of probabilities, that the applicant purchased the property for any other purpose other than for investment, quick sale and gain. I come to this conclusion even thought the applicant and Stephen Boots denied such intention.

46

It is clear on the authorities (see Ferrington's case) that the applicant's intention is not necessarily determinative in itself, however, especially in a case such as this, it is an extremely important factor to take into account. I find that the applicant's intention was one of investment and quick sale, rather than residency.

47

Clearly the applicant's residency was extremely short. She lived in the house for some 15 weeks, however made arrangements to sell it the day after she took possession of the same. Further, the applicant's departure from the home, in my view, is not properly explained by the break down of her relationship with her cousin. One would have thought that if the same was a genuine arrangement, there would have been more certainty agreed between the applicant and her cousin even taking into account that the two of them were extremely good friends.

48

Thus, for the above reasons, I conclude that the applicant does not fulfil the criteria in s 12(1) of the Act in that she did not occupy the property as her principal place of residence, rather she occupied the property with the intention of selling the same and making a profit. It was never the applicant's principal place of residence. Under those circumstances, the decision of the respondent will be affirmed.

49

It is noted, I have not considered matters concerning the applicant's alleged meagre use of utility services or failure to change address at the electoral office or the motor registration (driver's licence), because such matters would not be useful within the factual matrix of this case.