Mr Sievers of Counsel, instructed by Legal Branch of State Revenue Office

1 This is an application to review a decision of the respondent made on the 31st of January 2003 and affirmed by the respondent after review on the 25th of June 2003, whereby the respondent determined that the applicant should repay the respondent the sum of $7,000 paid to the applicant on the 17th of July 2001 pursuant to the First Home Owner's Grant Scheme (the decision). It should also be noted that the applicant was also paid a further sum of $7,000 pursuant to the Commonwealth Additional Grant Scheme of which he was ordered to repay, however, this review does not relate to the Commonwealth payment.

2 In April 2001 the applicant purchased vacant land at 2 Clara Court Horsham (the Clara Court land) for the sum of $32,000. On the 14th of June 2001 the applicant applied to the respondent for the First Home Owner's Grant in respect of the Clara Court land. The grant was paid to the applicant on the 17th of July 2001 in the amount of $14,000 (including $7,000 from the Commonwealth Additional Grant).

3 Subsequent to the purchase of the Clara Court land the applicant entered into a building contract to build a house on that land. Construction of the house commenced on 1 July 2001 and construction was to be completed by 1 November of that year. In November of 2001 the house was ready for occupancy and the applicant moved in some belongings, however a Certificate of Occupancy was not issued until 12 December 2001.

4 In December 2001, the applicant became concerned as to the amount of mortgage costs (interest and principal) he was paying to the St George Bank and talked to an agent about selling the Clara Court property which by that time contained the house that was constructed. On 6 January 2002 the house on the Clara Court land was offered for sale. It is unclear as to what date the house was sold, however, the applicant transferred the house to purchasers by a transfer date of 3 April 2002. Simultaneously, the applicant purchased a house from the parties to whom he sold the Clara Court property. The house then purchased by the applicant was in Lower Norton. It would appear that settlement of the two properties took place on 22 March 2002 and the purchase price for the Clara Court house and land was $198,000 whereas the purchase price for the Lower Norton property was considerably less. The applicant stated that he used the balance of the moneys to repay the mortgage to St George Bank.

5 The following facts are noted in relation to the applicant's use of the house constructed on the Clara Court Land:

a He did not update to the Clara Court address as his address on the electoral role or his driver's licence;

b The applicant used a post office box for the reception of his mail although, such box had been in his family for approximately 20 years and had prior to 1998 been used by his mother;

c The utilities at the Clara Road premises were used at a low level;

d Between November 2001 and the date of possession in March of 2002 the applicant slept at the premises for approximately seven non-consecutive nights however, the applicant did attend the premises regularly for the purpose of eating his meals during the day and had furniture at the premises which furniture was insured to the sum of $40,000;

e There was no garden or lawn at the property although boundary trees were planted by the applicant;

g The applicant spent most nights between November 2001 and March 2002 sleeping at his girlfriend's place where she and her two children resided. The applicant gave evidence that it was intended that his girlfriend and her two children would eventually come and live at the residence constructed on the Clara Court land;

h The applicant sold the Clara Court property in order to purchase a cheaper property.

6 The relevant legislation governing the dispute before me is to be found in s.12(1) of the First Home Owner's Grant Act 2000, that section reads as follows:

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. (Highlighting supplied by the writer)

7 The respondent based its decision on the fact that the applicant did not occupy the house constructed on the Clara Court land as his principal place of residence.

8 It should be noted that s.12 of the First Home Owners Grant Act was amended in 2003 to make it clear that an applicant must occupy the relevant home, as the applicant's principal place of residence for a continuous period of at least six months. I have taken the view, that the amending legislation does not assist me in interpreting s.12 of the 2000 Act prior to amendment.

9 The issue which I must decide is whether the applicant occupied the house on the Clara Court land as his principal place of residence. The applicant states that it was his intention at the time of applying for the grant to use the house built on the Clara Court land as his principal residence. He stated that he only sold the property because he intended to change jobs and he could not afford the mortgage payments however, he also stated that his financial position did not change between the time of the purchase of the land and the sale of the Clara Court property.

10 In Deane v Commissioner of Stamp Duties (Qld) 2 96 ATR 4382 Fryberg in the Supreme Court of Queensland was called upon to consider the meaning of principal place of residence within the meaning of the Stamps Act 1894 (Qld). His Honour decided that the issue should be determined on an objective basis. The facts of that case were that the taxpayer applied for a concessional rate of stamp duty in relation to a property he purchased in Corinda. The head note states:

Settlement took place on 9 December 1992. The taxpayers moved some of their furniture to the Corinda property. They did not intend to live immediately at the Corinda property but to move in after four or five weeks of renovations. The Sherwood property [the taxpayer's house at the time he purchased the Corinda property] remained unsold and was taken off the market in April 1993. The taxpayers and their children continued to live at the Sherwood property. However, they periodically visited the Corinda property and used it for entertaining. The taxpayers and their children also slept overnight at the Corina property from time to time. The Sherwood property was not put back on the market until October 1993.

11 The Commissioner subsequently reassessed the amount of stamp duty payable by the taxpayers on the Corinda property on the grounds that the acquisition of the property was not for the taxpayers' prescribed principal place of residence. Fryberg J at p.4390 stated:

It also seems to me that the word `principal' in the definition allows a wide range of factors to be taken into account, and also implies an objective test of what is the principal place of residence. That is not to say that the intention of the person acquiring the residence is not relevant. Indeed, Mr Logan for the Commissioner conceded that intention could be taken into account as a factor in the assessment. It seems to me that intention is relevant, but not dominant. That view of the law also seems to me substantially to be the test which was applied by the respondent in the present case

The evidence regarding the applicant's mail, their usage of electricity, the electoral roll, the time which they spent at Dewar Terrace compared with the time which they spent at Weinholt Street, the number of nights slept at each place, all combines to found a proper inference as to what was their place of abode or their residence - to put it another way, the place where their home was. ...

The fact of the matter is that the legislation requires more than just a purpose of acquisition, and it does not seem to me that they did enough to bring themselves within the terms of the Act.

12 It thus seems clear to me that while the intention of the applicant is certainly a factor to be taken into account, it is not the dominant factor to take into account in determining what his principal place of residence was at the relevant time.

13 In Levene v Inland Revenue Commissioners [1928] UKHL 1; (1928) AC 217 at 222 the House of Lords per Viscount Cave LC stated:

My Lords, the word `reside' is a familiar English word and is defined in the Oxford English Dictionary as meaning `to dwelling permanently or for a considerable time, to have one's settled or usual abode, to live in or at a particular place.' No doubt this definition must for present purposes be taken subject to any modification which may result from the terms of the Income Tax Act and Schedules; but, subject to that observation, it may be accepted as an accurate indication of the meaning of the word `reside'.

14 In this particular instance, in my view looking at the applicant's situation objectively and taking into account his stated intention, one would not say that he resided in the house built on the Clara Court land. While he had belongings in that house, he slept most nights at his girlfriend's place, and to all intents and purposes, his girlfriend and her children appeared to be his family. While it might have been his intention at the time of constructing the property to have the house as his principal place of residence, that intention never came to fruition. In my view, the applicant's situation in relation to the Clara Court property is that his occupation, if it be called an occupation at all was on a temporary basis.

15 In Zakariya v Chief Commissioner Office of State Revenue (2003) NSWADT 26 (unreported) the Administrative Decisions Tribunal of New South Wales considered similar legislation to what I am concerned with here. The facts of that case are similar to the present situation, they are stated in paragraph 2 of the decision of Justice Needham, he states:

Mr Zakariya bought the house because he and his wife had separated and he needed somewhere to live. The house was rented when purchased and the tenants stayed on until the end of the lease. He said that it was always his intention to live there; however, there was a hope that he and his wife would reconcile and so he did not move in when the house became vacant. The hope was thwarted, and he then ran into financial problems and had to sell the house.

13 Legislation needs to be interpreted according to its purposes. With the purpose of the Act in mind, the question which arises is whether (firstly) the applicant's intention to occupy the property as a home, and/or (secondly) his temporary occupation of it, bring him within the eligibility criteria of the Act.

14 It does not appear to me that the subjective intention of the applicant at the date of purchase brings him within the eligibility criteria. Sub-section 12(1) provides that the applicant `must occupy the home as the applicant's principal place of residence' within the twelve-month period. Those words require an actual occupation, not merely an intention to occupy. Accordingly, the applicant's stated intention (which is not contested by the respondent) does not bring him within the eligibility criteria.

17 In Dickeson (re Dickeson v Secretary, Department of Social Security [1989] AATA 190; (1998) 18 ALD 58), the Tribunal regarded `a substantial degree of occupation' as being persuasive (H_erbert v Byrne_ [1964] 1 All ER 882) and contrasted an occupation of a property by way of `occasional visiting' not constituting occupation of a home (Beck v Scholz [1953] 1 All ER 814). A `home' is likely to be a `place where persons ordinarily eat, morning and night, and where they sleep, and in the case of adults have characteristics of permanency'.

18 The phrase `principal place of residence' does not assume that an applicant need only live at one place, but that she or he may have two or more places of residence. However, the grant may only be paid in relation to the `principal' one of those places, that which the applicant regards as his main residence or home. From the corroborating evidence such as the address of the applicant shown on the contracts for purchase and sale of the Eaglevale property, and the from the lack of any corroborating evidence as to his use of the Eaglevale property as his mailing or other address, it appears that the Eaglevale property was a subsidiary and not a principal place of residence for the applicant.

17 The facts of this particular case are very similar to those which Justice Needham considered in Zakariya's case and in my view His Honour came to the correct conclusion. While the applicant has spent considerable time at the Clara Court residence in my view, it cannot be said that that was his principal place of residence. He only slept at that residence on seven odd occasions during a three to four month period. He did not use the residence as his mailing address or his electoral roll address nor for his driver's licence. The applicant maintained that he never got around to changing those matters. However, in my view all those matters go to indicate to an objective outsider that the Clara Court residence was not the applicant's principal place of residence. I place emphasis on the fact that all but seven of the nights in the relevant period the applicant slept at his girlfriend's residence where her two children also resided. In my view, it would be thought by an outsider that they would be his family and that his girlfriend's place was his principal place of residence.

18 Drawing a principle from all the cases to which I have referred above, it seems to me that the appropriate test is what would be the attitude of for an outsider looking at all the relevant objective factors including the intention of the applicant. After that attitude is decided one can ask whether the house built on the Clara Court land was the applicant's principal place of residence. In my view an outsider doing such an exercise would undoubtedly come to the conclusion that the Clara Court property was not the applicant's principal place of residence but more than likely the residence of the applicant's girlfriend was his principal place of residence at that time.

19 Given this finding, it necessarily follows, that the house built on the Clara Court property was not the applicant's principal place of residence within the meaning of s.12(1) of the Home Owner's Grant Act 2000 and as such, respondent's decision should be affirmed.