Byrne v Chief Commissioner of State Revenue

Jurisdiction, applicable law and the decision under review

1. As the Chief Commissioner's decision to reverse the grant was the subject of a notice of objection by Ms Byrne which was lodged on 10 January 2022, this Tribunal has jurisdiction to review that decision pursuant to Section 96 of the Taxation Administration Act 1996 (NSW) (Administration Act), section 9 of the Administrative Decisions Review Act 1997 (NSW) (ADR Act) and section 28 of the Civil and Administrative Tribunal Act 2014 (NSW) (NCAT Act).
2. In conducting that review I am required by section 63 of the ADR Act to determine the correct and preferable decision, having regard to the materials before me and the applicable law.
3. The decision under review here is the Chief Commissioner's decision on 17 December 2022 to reverse Ms Byrne's exemption from duty under the FHBA. The decision under review is not the Chief Commissioner's decision to disallow Ms Byrne's objection to his decision, which she made on 10 January 2022 : see Chief Commissioner of State Revenue v Paspaley [2008] NSW CA 184 at [28], per Basten JA.
4. The role of the Tribunal in determining an application for administrative review under section 63 (1) of the ADR Act is: … to decide what the correct and preferable decision is having regard to the material then before it, including the following: (a) any relevant factual material, (b) any applicable written or unwritten law.
5. For the purpose of making its decision, the Tribunal may exercise all of the functions that are conferred or imposed by any relevant legislation on the administrator who made the decision: ADR Act s 63(2).

Onus and standard of proof

1. It is of fundamental importance that under section 100(3) of the Administration Act, in a review of this nature the applicant taxpayer has the onus of proving their case. Accordingly, Ms Byrne as the applicant is required to prove all matters necessary to enable me to determine the issues her favour. That onus rests only on her as the applicant. There is no onus or obligation on the Chief Commissioner to demonstrate that the assessments are correctly made: Federal Commissioner of Taxation v Dalco (1990) 168 CLR 614; [1990] HCA 3; Gauci v Federal Commissioner of Taxation (1975) 135 CLR 81 at 89 (Mason J).
2. The requisite standard of proof is the balance of probabilities: B & L Linings Pty Limited v Chief Commissioner of State Revenue (2008) 74 NSWLR 481; [2008] NSWCA 187 at [87], [104] (Allsop P) ; Cornish Investments Pty Limited v Chief Commissioner of State Revenue (RD) [2013] NSWADTAP 25 at [31].

Relevant statutory provisions

1. Section 69 of the Duties Act provides that the FHBA Scheme is intended to assist people who are acquiring a new home that is their first home, by providing a concession as to or an exemption from duty in particular circumstances. Section 74 prescribes the transactions which attract a grant under the scheme and it is uncontested that Ms Byrne's purchase of the Hamilton property satisfied section 74.
2. Section 76 of the Duties Act, the relevant parts of which I have cited at [3] above, is the key operative provision. It sets out the 6-month continuous residence requirement, which is central to this case.
3. Section 79 allows the Chief Commissioner to reassess the duty payable where the relevant agreement or transfer is found to be ineligible under the scheme; in the following terms: 79 Reassessment of duty payable where duty concession wrongly applied (1) The Chief Commissioner may reassess the duty chargeable in respect of an agreement or transfer that is initially approved under the scheme if the Chief Commissioner forms the opinion that the agreement or transfer is not eligible under the scheme (because of failure to comply with the residence requirement or otherwise). (2) The Chief Commissioner may issue a notice of assessment, based on the reassessment, for the duty chargeable in respect of the agreement or transfer.

Documentary material and submissions

1. The parties have provided the following documentary material which I have considered.
2. Ms Byrne has provided her application for review, to which she had attached relevant documentation and correspondence, including the Chief Commissioner's Notice of Investigation dated 7 September 2021 attaching in turn a draft a statutory declaration for completion by Ms Byrne (although no completed and sworn declaration so contemplated was made available to me), the Chief Commissioner's notice of re-assessment dated 17 December 2021, Ms Byrne's objection to the re-assessment, the Chief Commissioner's response and 4 black and white photos, apparently showing renovation and painting work being undertaken at the property. Ms Byrne has also provided submissions dated 16 May 2023, with attachments comprising electricity bills and emails with an officer of State Revenue.
3. The Chief Commissioner has provided written submissions dated 2 May 2023, a folder of documents provided under section 58 of the ADR Act together with a second folder filed on 5 May 2023 containing further documents under section 58 ((collectively, the section 58 bundle), a tender bundle and a folder entitled "Bundle of Authorities".
4. 9 documents or sets of documents have been handed-up, without objection, during the hearing. I have considered them in conjunction with the other documentation described in this section. The documents handed-up are marked for identification as follows: 1. MFI-1: Email from Ms Byrne 27.07.23 2. MFI-2: Applicant's objection email 3. MFI-3: Smartcard History commencing 25.07.18 (8 pages) 4. MFI-4: Email from Ms Byrne 06.04.23 (4 pages) 5. MFI-5: Bundle of statements; St George Bank account no. 108400920 6. MFI-6: Schedule: "Mum and Dad Repayments" 08.12.17-16.09.19 7. MFI-7: NSW Fair Trading Summary Bond Report, Bond No. S 296605-7. 8. MFI-8: Residential Tenancy Agreement 24.07.18 for 14/314 Clovelly Road , Clovelly (13 pages) 9. MFI-9: Chief Commissioner's Aide Memoire (97 pages plus Index).
5. Ms Byrne initially gave unsworn testimony from the Bar table. Later, from the witness box, she affirmed the truth of her earlier testimony and gave further sworn testimony. She was cross-examined on her evidence generally. No other witnesses were called.
6. Ms Byrne on her own behalf and Ms Morgan on behalf of the Chief Commissioner made oral submissions in chief and Ms Byrne made further oral submissions in reply.

The real issue for decision

1. The real issue is simply stated. Did Ms Byrne occupy the Hamilton Property as her principal place of residence for a continuous period of 6 months, commencing before 8 May 2019 (being 12 months after the date of the transfer of title in the property to her)?

Uncontested facts

1. The facts outlined at [5] above are uncontested. Additionally, it does not appear to be contested that: 1. completion of Ms Byrne's purchase of the Hamilton Property took place on 8 May 2018; 2. prior to the completion of the purchase of the Hamilton Property, Ms Byrne lived with her parents at their home at Concord West; 3. Ms Byrne was 27 years of age at the time she purchased the Hamilton Property; 4. during the 6-month period commencing on 8 May 2018 Ms Byrne's boyfriend, later husband, lived in the Eastern Suburbs of Sydney and Ms Byrne's parents continued to live in Sydney's Western suburbs, at Concord West; and 5. during that period Ms Byrne was in full time employment. She worked from offices located at Barangaroo in the City of Sydney.

The parties' respective cases and contested facts

1. In summary Ms Byrne's case is that she used and occupied the Hamilton Property as her principal place of residence for a continuous period of over 6 months, being the period between 10 May 2018 and 4 February 2019 (which for convenience I will refer to as "the asserted residence period") and that, because that period was within 12 months of completion of her purchase of the Property, she is entitled to the FHBA Scheme exemption from duty, so that the Chief Commissioner's decision to reverse her exemption from duty was wrong.
2. In particular, Ms Byrne has asserted in a statutory declaration of 9 November 2021 that during the asserted residence period she would: 1. prepare meals and eat at the Property approximately 4 nights per week; 2. sleep at the Property approximately 4 nights per week; 3. shower there 4 nights per week; 4. do laundry there once or twice per week; 5. relax, watch television and spend spare time there 4 nights per week 6. entertain there one or two nights per week; and 7. clean the Property approximately one day per week.
3. The Chief Commissioner's case is that his decision to reverse the exemption was the correct and preferable decision because Ms Byrne has not established that in any continuous period of 6 months during the 12 months following the date of the Transfer, including but not limited to the asserted residence period, did she use and occupy the Hamilton property as her principal place of residence.
4. As noted above, many facts are uncontested. But other important facts are contested; and some of them strenuously. Ms Byrne's case turns on how I find in relation to those contested facts, because they go directly to the issue of whether she occupied the Hamilton property as her principal place of residence for the asserted residence period.
5. The contested facts arise as follows. Ms Byrne's case is that she occupied the Hamilton property as her principal place of residence continuously during the asserted residence period by spending approximately 4 nights per week there throughout that period and the remaining 3 nights either at the house of her then boyfriend (now husband) in Bronte, which is in the Eastern suburbs of Sydney, or her parents' home in Concord West which is in the Western suburbs. During that period Ms Byrne was employed in an office in Barangaroo in the City of Sydney. It is a matter of common knowledge that Hamilton is approximately 165 kilometres from Barangaroo.
6. As I understand Ms Byrne's case, she asserts that for each of the 4 nights per week she spent at the Hamilton Property she would commute in the early morning by train to the City of Sydney for work, and return (usually but not always by train) the same evening.
7. However, the Chief Commissioner contends that, having regard to the evidence as to Ms Byrne's use of transport and her purchases, which includes Ms Byrne's bank statements and travel and related records which have been produced and collated as document MFI-9: "Respondent's Aide-Memoire", her assertion that she spent approximately 4 nights a week at the Hamilton Property throughout the asserted residence period should not be accepted and that she has failed to discharge her onus of proof of continuous residence at the Property during that period.
8. The Chief Commissioner also says that that conclusion is not altered by Ms Byrne's supplementary evidence of occupancy, including extracts from the Electoral Roll, Australian Tax Office records, bank records, records of utilities (electricity and water) usage, insurance cover and that in any case, in the circumstances I should give only limited weight to that class of evidence: see Peng v Chief Commissioner of State Revenue [2022] NSWCATAD 212 at [55]- [57].
9. The Chief Commissioner further contends that significant parts of Ms Byrne's evidence are either inconsistent with objective records or otherwise not credible.
10. Finally, the Chief Commissioner draws my attention to the fact that Ms Byrne has not called or tendered evidence from her husband (who was her boyfriend, then fiancé at relevant earlier times), nor from her parents, each of whom could have corroborated her account of the times she spent with them respectively during the asserted residence period and, in the case of her husband, might have provided confirmation of significant parts of her travel in Sydney and possibly between Sydney and Hamilton. That would go directly to establishing the actual extent of Ms Byrne's occupation of the Hamilton property during the asserted residence period.
11. As that potential evidence has not been tendered by Ms Byrne, the Chief Commissioner submits that I should infer that the evidence of Ms Byrne's husband and parents would not have assisted her case. The issue of whether such an inference should be drawn arises from the decision of the High Court in Jones v Dunkel (1959) 101 CLR 298 at 320. Relevantly, the "Jones v Dunkel inference" was drawn in Falvo v Chief Commissioner of State Revenue [2016] NSWCATAD 52, (Falvo), at [52]. Falvo dealt with a similar issue to that in the present proceedings and there are some similarities in the factual background of each case. Ms Byrne did not address the Chief Commissioner's request that I draw the Jones v Dunkel inference.
12. I do draw the Jones v Dunkel inference in respect of the absence of any evidence from Ms Byrne's husband or her parents. That is, I infer that if evidence from Ms Byrne's husband or either of her parents had been adduced by her, it would not have assisted her case.

Ms Byrne's case as to the extent of her use and occupation

1. In answer to questions 1 and 6 from the Office of State Revenue on 14 November 2021 (section 55 bundle, Tab 14), Ms Byrne said that she commenced residing at the Hamilton property on 10 May 2018 and moved out on 4 February 2019. Question 13 from the Office of State Revenue of the same date and Ms Byrne's answers to it, were as follows: 13. During your residency at (the Hamilton property), on average, how many days per week would you undertake the following activities: Eat/prepare meals/cook? (Answer): 4 nights Sleep? (Answer):4 nights Shower? (Answer): 4 nights.. Relax/Watch TV/ spend spare time? (Answer): 4 nights.
2. In Ms Byrne's evidence at the hearing, including under cross-examination, she affirmed that account of her time spent in use and occupation of the Property during the asserted residence period; namely that she stayed at the Property 4 nights per week and in Sydney for approximately 3 nights per week, either with her boyfriend in the Eastern Suburbs or with her parents at Concord West and made use of the Hamilton property to the extent and in the way described at [28] and [29] above while there.

Analysis of the evidence as to use and occupation

1. My analysis of the relevant evidence on this key issue is as follows. 1. Ms Byrne's account is seriously undermined by the Chief Commissioner's evidence as to as to her credit card activity in Sydney and the Hamilton-Newcastle area and her travel both in Sydney and between Sydney and Hamilton, the latter having obtained from Opal card records. The Chief Commissioner has collated that evidence and presented it as document MFI-9: "Respondent's Aide-Memoire". That document is in the form of a day-by-day analysis of Ms Byrne's expenditure and movements, cross-referenced to documents elsewhere in evidence, particularly in the section 58 bundle and the Chief Commissioner's Tender Bundle. It shows: 1. the location of Ms Byrne's spending activity based on her credit card entries for the relevant period; 2. the dates and times of her travel by public transport, (in particular trains and buses) and in particular her travel between Sydney and Hamilton and within Sydney (in particular travel to and from the Eastern Suburbs and to and from the Concord area), based on her Opal card entries. 1. Because there is no evidence to the contrary, it is strong evidence of her location at particular times and periods on particular dates. 2. I find that document MFI-9 constitutes reliable evidence of those matters. The collated information is reliable because it is derived from independent third party sources and its accuracy has not been expressly challenged by Ms Byrne; although she maintains her account of the relevant matters, as described at [28] [29] and [40] above. 3. Document MFI-9 and the evidence it contains is to be preferred to Ms Byrne's uncorroborated estimates of the frequency and extent of her use and occupation of the Property. It is a more objective and reliable guide to those matters. That is particularly so because Ms Byrne failed to adduce evidence in support of her assertions on this subject from her family members, who could have provided some verification of the periods in which she claimed to be in Sydney. 4. I conclude from that evidence that during the period of asserted residence which Ms Byrne relies upon (that is, between 10 May 2018 and 4 February 2019), she did not use and occupy the Hamilton Property to the extent that she claims, as summarised at [28] and [29] above. 5. Even on an analysis of the evidence and particularly MFI-9 which is somewhat generous to Ms Byrne she could not have slept at, or otherwise used the Property in manner she claims.
2. On that basis I accept the submission by Ms Morgan on behalf of the Chief Commissioner that the Chief Commissioner's evidence and in particular document MFI-9, the Aide-Memoire, demonstrates that Ms Byrne used and occupied the Hamilton property for only a limited number of days during the asserted residence period: substantially fewer than Ms Byrne asserted, as described above.
3. However, following my detailed examination of the MFI-9 material, I am prepared to reach an estimate of Ms Byrne's use and occupation of the Hamilton property which is a little more generous than that of the Chief Commissioner, by giving some credence to Ms Byrne's assertion that on some days in that relevant period she may have travelled to Sydney in the early hours of the morning and not arrived back at the Property until late evening.
4. For example, on many days Ms Byrne is shown to have been in Sydney in the early to mid-evening but on the following day to have made purchases in the Newcastle-Hamilton area. For the purpose of the assessment of this issue I am prepared to allow that on each of those evenings she may have slept at Hamilton.
5. But on other days there is an early morning transaction in Sydney which would suggest on the balance of probabilities, and in the absence of a contrary explanation or evidence from Ms Byrne, that she spent the previous evening in Sydney and not in Hamilton, some 168 kilometres away.
6. For example, Document MFI-9 demonstrates that: 1. on Thursday 26 July 2018 Ms Byrne's Opal card was used for entrance to Concord West Station at 7.11am; 2. on Tuesday 31 July the card was used for the same purpose the same at 6.28am; 3. other entries show the Opal card being used for travel from the City to the Eastern Suburbs in the evening, and others demonstrating the reverse commute early on the following morning (for example on Monday 13 and Tuesday 14 August).
7. On the balance of probabilities and in the absence of further evidence or explanation from Ms Byrne, I am not persuaded that she spent those nights at the Hamilton Property, either to sleep, or to eat, or wash or to make other use of the Property.
8. On that basis, even given that my conclusions from the evidence in MFI- 9 is more generous to Ms Byrne's case than is the Chief Commissioner's, in the absence of contradictory evidence I must conclude that Ms Byrne could have used the Hamilton Property to sleep in overnight on, at most, 55 evenings during the asserted residence period, which comprises 267 days. That is, even on a construction of that objective evidence favourable to Ms Byrne, she made use of the property on only 20.6% of those evenings, or approximately one night in 5 (so, at best, one or two nights per week on average) during the period in which she asserts she used and occupied that property as her principal place of residence.
9. I use the phrase "made use of the property" so as to encompass the indicia of use recognised in the cases, including those discussed below. In short, I find that during the asserted residence period Ms Byrne used the Property as a place to sleep and to eat and she used its electricity, furniture and fittings and made other use of it, such as entertainment of friends, only in a transient, temporary, contingent or passing way.

Consideration: Meaning of "principal place of residence"

1. A leading authority on the scope of the expression "principal place of residence" is Chief Commissioner of State Revenue v Ferrington (GD) (2004) NSWADTAP 41 ("Ferrington"). In that case the Appeal Panel of the Administrative Decisions Tribunal suggested certain principles to be applied in determining a taxpayer's "principal place of residence". The principles identified which appear to be pertinent to the present case include the following. 1. The phrase "principal place of residence" should be given its ordinary meaning in the context in which the phrase appears. 2. The issue 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, if considered at all, must be gauged objectively and it is relevant but not determinative of the issue. 3. In order for there to be a finding that a particular person occupied a property as their principal place of residence their 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. 4. Where a person has more than one residence, the one which will be considered the principal place of residence is dependent upon the assessment of the other factors identified in Ferrington, including such matters (relevantly) as the amount of time that each residence is occupied, the strength of ties and connection with the residence including where family members reside and the nature and quality of the occupation of the respective residences: See Lo v Chief Commissioner of State Revenue [2013] NSWCA 180 at [39] and [42]- [47]; Chief Commissioner of State Revenue v Mesityl [2003] NSWADTAP 57, at [46]
2. In Raissis v Chief Commissioner of State Revenue [2021] NSWCATAD 99 ("Raissis"), which came before me, I undertook a review of leading authorities on the meaning of the phrase "principal place of residence", including Ferrington. The result in Raissis turned on the application of that term as it appears in the Land Tax Management Act 1956 (NSW) (LTM Act), but I also considered authorities on the terms as used for the purposes of the First Home Owners' Grant (New Homes) Act 2000 (NSW) (FHOG Act), which was the legislation which covered concessions to first home owners prior to the introduction of the FHBA Scheme. The FHOG Act cases included Ferrington and Bates v Chief Commissioner of State Revenue [2004] NSWADT 13.
3. As I noted in Raissis, the matter of Yen-Cheng Chuang v Chief Commissioner of State Revenue [2009] NSWADT 160 (Yen-Cheng Chuang), at [19] to [23], provides a useful summary of the considerations applicable to determining a person's principal place of residence.
4. There, the Tribunal observed, at [20]: In ascertaining whether a particular residence of a person is the principal place of residence of the person it is necessary to use an objective test and the conclusion is determined by considering the extent and quality of the use and occupation of the residence in each case: Dean v Commissioner of Stamp Duties (Qld) (No 2) [1996] 2 Qd R 557 per Fryberg J.
5. As noted in Yen-Cheng, older cases appear to accept that one formulation of a place of residence is "the place where (the person) eats, drinks and sleeps". However, the Victorian Civil and Administrative Tribunal, in Ziino v Commissioner of State Revenue [2004] VCAT 1707 (Ziino), added a note of caution about the weight which should be given to the "sleeping" element, in the following terms: …. while sleeping by itself in a place can be an indication of a principal place of residence, it is not the sole matter to be taken into account. One needs to look at a whole indicia of matters… One needs to look as well at where the applicant ate; his use of electricity and the furniture and fittings and other matters such as entertainment of friends in the house... Sleeping in a place does not make a residence. It has got to be the whole indicia of things that are done in a home which are described in the cases...

Consideration- "Transient, temporary, contingent or passing" use

1. The authorities just cited lead to the conclusion that when a person's occupation of a property is found to be of a "transient, temporary, contingent or passing nature", that will be a strong indication that the property is not the principal place of residence of that person, because their occupation and use of it lacks the degree of permanence necessary for the property to be so regarded, for revenue purposes. What is also made clear in Ziino is that the test as to permanent place of residence is an objective one and any conclusion as to it should be made by considering the extent and quality of the relevant person's use and occupation of the residence.
2. As shown above, Ms Byrne's evidence and submissions on this issue stand in stark contrast to the objective evidence adduced by the Chief Commissioner.
3. In the course of Ms Byrne's oral submissions at the hearing, I drew her attention her assertions of continuous residence and use of the Hamilton property contained in her email to the Office of State Revenue of 14 November 2021. That email was in response to 30 numbered questions from the Office of State Revenue. I asked Ms Byrne whether any of her answers to those questions now gave her any problems. She responded (in part) by confirming that she had answered the questions honestly "but used approximations" and that: I wasn't aware that being so open was going to cause me problems.
4. I do not think Ms Byrne was being deliberately untruthful or intentionally misleading in her submissions at the hearing which I have cited above (and which, by her affirmation, she declared to be true), nor even in her answers to the Office of State Revenue of 14 November 2021 cited above.
5. But Ms Byrne's account of the duration and degree of her use and occupation of the Hamilton property during the asserted residence period (that is, the period during which on her assertion she used and occupied the Hamilton Property) is quite unpersuasive in light of the third-party data adduced by the Chief Commissioner in MFI-9.
6. I have therefore concluded that: 1. The Chief Commissioner's evidence and in particular Exhibit MFI-9, that Ms Byrne's use and occupation of the Hamilton property in the relevant period, being the asserted residence period, was of such a transient, temporary, contingent or passing nature that it defeats her assertion that she occupied the property as her principal place of residence during that period. 2. Ms Byrne has failed to satisfy the onus of proof which she bears to establish, on the balance of probabilities, that the Chief Commissioner's decision to reverse her exemption from duty was other than the correct and preferable decision.

Additional evidence from Chief Commissioner: renovations and leasing

1. Those conclusions mean that I do not need to take into account the evidence submitted by the Chief Commissioner as to: 1. Ms Byrne having undertaken renovations and made related arrangements for letting of the Property; 2. the subsequent letting of the Property; and 3. the nature of financial arrangements between Ms Byrne and her parents involving her use of their Concord West home during the asserted residence period under an arrangement which the Chief Commissioner suggested might be characterised as a lease or licence.
2. I make no findings as to those matters.

Interest and Penalty

1. At the commencement of the hearing, Ms Morgan confirmed that the Chief Commissioner was not pressing the imposition of any penalty duty or interest.

Conclusions and order

1. It must follow that the Chief Commissioner's decision to reverse Ms Byrne's exemption from duty under the First Home Buyer's Assistance Scheme is the correct decision.
2. As that decision was the only one open to the Chief Commissioner in applying the relevant statutory provisions to the taxpayer's circumstances, it must also be the preferable decision.
3. As the decision was the correct and preferable one, it must be affirmed and I will order accordingly.

ORDER The decision of the Chief Commissioner to reverse the Applicant's exemption from duty under the First Home Buyer's Assistance Scheme is affirmed.

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar 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: 29 August 2023