Larkin v Chief Commissioner of State Revenue

Material before the Tribunal

1. The only material provided by the applicant is his Application for a stay or interim order and his Application for administrative review of the respondent's assessment determination. In these Applications the applicant has identified the grounds on which his application was made and the reasons for the delay in lodging them with the Tribunal.
2. While the respondent indicated that he did not seek to rely on any evidence or submissions in response to the applicant's extension of time application, he did, as I have noted, provided his section 58 documents which contains material relevant to the applicant's administrative review application, including copies of the material the applicant and relevant third parties provided in response to the respondent's 2021/2022 investigation and copies of decisions that were made.
3. In this case, the s 58 documents provided by the respondent were contained in two bundles that were paginated and individually numbered. At the front of each bundle was an index of the documents contained in both bundles.
4. In my view this material, in part, is also relevant to the question as to whether time should be extended for the applicant to lodge his administrative review application.

Is the extension of time application suitable for determination on the papers?

1. In my opinion, the applicant has been given ample time: 1. to file and serve any evidence or written submissions in support of his application for an extension of time; and 2. to indicate whether he objected to application for an extension of time to be determined on the papers.
2. In my opinion, in the absence of the applicant having withdrawn his extension of time application and having regard to the guiding principle in s 36(1) of the NCAT Act it is appropriate to deal with this application on the material that is before the Tribunal.
3. I am also satisfied that the issues for determination in the applicant's extension of time application, can be adequately determined in the absence of the applicant and the respondent by considering the material that is before the Tribunal and I make an order accordingly: NCAT Act s 50(2).

Background

1. As I have already noted, the applicant executed the contract for the sale of the Property on 10 July 2017. He was the sole purchaser of the Property.
2. The applicant's purchase of the Property was settled on 11 August 2017.
3. On 23 November 2021, the respondent issued the applicant with a Notice of Investigation as to whether he had met the prescribed 'residence requirement' of the abovementioned grant. The Notice indicated what information the applicant was required to provide as to confirmation of having met the prescribed 'residence requirement'.
4. The applicant did provide the respondent with some information in response to the Notice. As part of his investigation, the respondent also obtained additional information from third parties, including relevant utility suppliers, the lessee of the Property at the time the property was sold, the applicant's employer and the applicant's bank.
5. On 31 January 2022, the respondent wrote to the applicant to advise that the investigation had been completed, and a decision had been made to reverse the decision to grant to him a First Home duty exemption or concession on his purchase of the Property, because he had not met the prescribed 'residence requirement' of that grant. Reasons for that finding were not provided. Nor does it appear that the respondent advised the applicant about what information it had obtained from third parties.
6. On the same day (31 January 2022), the respondent reassessed the duty payable on the purchase of the property and issued the assessment decision (which included interest and penalty tax) that is the subject of the applicant's administrative review application in these proceedings: see TAA s 9(1) and Duties Act s 79.
7. On 15 February 2022, the applicant lodged an object to the respondent's assessment, which he was entitled to do: see TAA s 86.
8. On 2 May 2022, the respondent determined to disallow the applicant's objection. In the s 93(1) TAA Determination Notice the respondent noted the discretion in s 76(2) of the Duties Act and said: This discretion can only be applied where the Chief Commissioner believes that: (a) the applicant intended to occupy the home as the applicant's principal place of residence for a period of 6 continuous months commencing within 12 months after completion of the eligible transaction; and (b) there are good reasons to waive or reduce the occupancy requirement. Further, at the time of the commencement of the eligible transaction, the Taxpayer must have intended to occupy, and must objectively have been capable of occupying the home as the applicant's principal place of residence and must be capable doing so for at least six continuous months commencing within 12 months after completion of the eligible transaction. In the present case the Property was rented during the client residency requirement and the Taxpayer was required to work in scone. Whilst, the Chief Commissioner acknowledges it would have not been feasible to travel after work to the Property. These are not considered to be exceptional circumstances to warrant discretion. The Chief Commissioner discretionary powers are reserved for unforeseen and unavoidable events such as: 1. Incapacity of the applicant to live in the home due to illness. 2. Home becomes inhabitable due to health/structure issues or natural disasters. Therefore, the Chief Commissioners decision to not waive or reduce the occupancy requirement is confirmed.
9. In the Notice of Determination, the respondent set out how late payment interest and penalty tax was calculated and concluded by setting out the applicant's review rights to the Tribunal or the Supreme Court if he was dissatisfied with the respondent's assessment decision. The applicant was also advised that any request for review would need to be made within 'sixty (60) days of the date' of Determination Notice.
10. On 22 July 2022, the respondent issued a Notice of Outstanding stamp duty Debt to the applicant as no payment towards the amount assessed on 31 January 2022 had been made. The applicant responded, by email, the following day to say he was in the right, and it was cruel to demand the information for his case so long after the event.
11. On 4 September 2023, the respondent sent an email to the applicant drawing his attention to the outstanding stamp duty debt. The applicant was also advised that if no response or payment was received by 11 September 2023, further recovery action would be taken by the respondent.
12. On 11 September 2023, the applicant lodged this application for external review and an application for a stay or interim order: see TAA s 96(1).

Relevant law - extension of time

1. There is no dispute that the respondent's assessment decision the subject of the applicant's substantive application is an administratively reviewable decision by the Tribunal or the Supreme Court: TAA s 96(1) and ADR Act ss 7 and 9.
2. Section 99 of the TAA Act makes provision for when an application for administrative review is to be made. That section relevantly provides as follows: 99 Time for making application for review (1) An application for review following a determination by the Chief Commissioner of an objection must be made not later than 60 days after the date of issue of the notice of the Chief Commissioner's determination of the objection. The court or tribunal to which the application is to be made may allow a person to apply for a review after that 60-day period.
3. In Pharmacare Laboratories Pty Ltd v Chief Commissioner of State Revenue [2009] NSWADT 128, at [9] to [16], the former Administrative Decisions Tribunal referred to decisions of the Commonwealth Administrative Appeals Tribunal (AAT) which had considered the applicable guiding principles (non-exhaustive) in the exercise of the discretion in s 14ZW of the Commonwealth Taxation Administration Act 1953, which is in similar terms to s 99(1) of the NSW TAA.
4. At [9] the Tribunal noted the following remark of Wilcox J in Hunter Valley Developments Pty Limited v Cohen (1984) 7 ALD 315: 1. Special circumstances need not be shown but the court will not grant the application unless positively satisfied that it is proper so to do... Indeed, it is the prima facie rule that proceedings commenced outside that period will not be entertained.
5. The Tribunal went on to cite the applicable principles set out by the AAT in Hunter Valley Developments. In summary these included: 1. the length of delay in the taxpayer lodging his/her application for administrative review; 2. the taxpayer's explanation for the delay in lodging his/her application for review within the time stipulated by Parliament; 3. any prejudice to the respondent, including any prejudice in defending proceedings occasioned by the delay. The mere absence of prejudice is not enough to justify the grant of an extension; 4. the merits of the substantial administrative review application - namely, whether on its face the substantive administrative review application is frivolous, must fail or is one where the taxpayer has no arguable case based on the terms of the application and the material that is before the Tribunal.
6. At [15] the Tribunal also cited with approval the following remarks of Hill J at [59] in Brown v Commissioner of Taxation 1999 FCA 563: 59 What is required is the balancing of the delay; the explanation for it; the circumstances which gave rise to it and such prejudice if any as may be shown to exist to the Commissioner against the prejudice which may arise to a taxpayer who has by reason of the failure to object in time lost the right to a review of the assessment. In this balancing process the Commissioner or the Tribunal on a review will be guided by what the justice of the case requires. The balancing process should be approached on the basis that while Parliament has stipulated a time in which objections are required to be lodged it has entrusted to the Commissioner a power to extend that time in appropriate circumstances. The decision maker should not lose sight of the fact that s 14ZW is an ameliorating provision designed to avoid injustice.
7. Since the enactment of the NCAT Act, the Tribunal has considered applications for an extension of time to lodge an administrative reviewable decision of the respondent under s 41 of the NCAT Act: for example, see Giammarco and Giammarco v Chief Commissioner of State Revenue [2019] NSWCATAD 77 at [5] and following. That section is broad in its application and not limited to a taxpayer's application for administrative review under the TAA Act and is in the following terms: 41 Extensions of time (1) The Tribunal may, of its own motion or on application by any person, extend the period of time for the doing of anything under any legislation in respect of which the Tribunal has jurisdiction despite anything to the contrary under that legislation. (2) Such an application may be made even though the relevant period of time has expired.
8. The applicable legal principles to the application of s 41 are well established and do not differ substantially to those set out by the Tribunal in Pharmacare Laboratories Pty Ltd: see Jackson v NSW Land and Housing Corporation [2014] NSWCATAP 22 at [18] and [22], which were summarised at [22(3) and (4)] as follows (citations omitted): (3) Generally, in an application for an extension of time to appeal the Appeal Panel will be required to consider: (a)The length of the delay; (b)The reason for the delay; (c)The appellant's prospects of success, that is usually whether the applicant has a fairly arguable case; and (d)The extent of any prejudice suffered by the respondent … ; and (4) It may be appropriate to go further into the merits of an appeal if the explanation for the delay is less than satisfactory or if the opponent has a substantial case of prejudice and, in such a case, it may be relevant whether the appellant seeking an extension of time can show that his or her case has more substantial merit than merely being fairly arguable - …
9. In the absence of any written submissions from the respondent I have applied the principles set out in Pharmacare Laboratories Pty Ltd as they specifically relate to the application of s 99(1) of the TAA and I will leave it to others to determine if this is correct. At the same time, I can indicate that, in this case, I would make the same findings if I applied the principles set out in Jackson.

Period of delay and reasons for delay

1. In this case there is a 13-month delay in the appellant having lodged his administrative review application. In my view, this is not an insignificant delay.
2. In the Application for a stay or interim order, the applicant said he had applied to the Tribunal for administrative review, within time, in May 2022. He said that, when making his 2023 applications, the Tribunal advised that, his May 2022 application for administrative review had not been actioned (received) by the Tribunal because the applicable fee for that application had not been received: see Civil and Administrative Rules 2014 rule 23(1)(d).
3. I accept that the applicant felt stressed and anxious when the respondent notified him of his investigation and subsequent assessment decision. However, it always has been the responsibility of the applicant to ensure that he met the 'residence requirement' of the grant and to provide the respondent with the evidence which supported this to be the case.
4. It is also difficult to understand why the applicant did not follow-up on his May 2022 application to the Tribunal after he received the outstanding debt notice from the respondent in July 2022.
5. Hence, in my view, the applicant's reasons for the delay do not on their own warrant time to be extended.

Prejudice - if any

1. The respondent did not oppose time being extended for the applicant to lodge his application for administrative review of the respondent's re-assessment of duty payable on the applicant's purchase of the Property.
2. In the absence of having received any written submissions by the respondent, I have assumed that the respondent's position is that it is not prejudiced if time were to be extended. That position, if correct is appropriately made. While this is a factor to be considered in the exercise of the Tribunal's discretion under s 99(1) of the TAA it is not the only one.

Is the applicant's administrative review application arguable or does it lack merit?

1. In considering whether the applicant's administrative review application is arguable it is necessary to briefly deal with the nature of the Tribunal's jurisdiction on review, the legislation relevant to the decision the subject of review and the material that has been provided by the parties to date.

The Tribunal's administrative review jurisdiction

1. On administrative review, the role of the Tribunal is to determine the correct and preferable decision having regard to the material before it, including any relevant factual material and any applicable law: ADR Act s 63(1).
2. On administrative review of a reviewable decision of the respondent, s 100(3) of the TAA provides that the applicant has the onus of proving his/her case. That is, the onus is on the applicant to prove that he was entitled to a grant of the First Home New Home duty exemption or concession when he purchased the Property. In other words, the applicant bears the onus to prove that he met the 'resident requitement' in s 76 of the Duties Act

The Duties Act

1. The provisions regulating the First Home Buyers Assistance Scheme are contained in Division 1 of Part 8 of the Duties Act.
2. Section 69 in this Division provides that the scheme is intended to help people who are acquiring their first home, by the acquisition being subject to a concession or exemption from duty.
3. Section 71 sets out who is eligible to apply under the scheme.
4. The 'residence requirement' under the scheme is set out in s 76. As at 10 July 2017, that section relevantly provided as follows: 76 Residence requirement (1) The home must be occupied by the first home owner or one of the first home owners who is acquiring it as a principal place of residence for a continuous period of at least 6 months, with that occupation starting within 12 months (or such longer period as the Chief Commissioner may approve) after completion of the agreement or transfer. This requirement is referred to as the residence requirement. (2) The Chief Commissioner may, if satisfied there are good reasons to do so in a particular case - (a) modify the residence requirement by approving a shorter period of occupation by a first home owner, or (b) exempt a first home owner from the requirement to comply with the residence requirement. …
5. In May 2022, Parliament inserted the following subsection into s 76 (see State Revenue and Fines Legislation Amendment (Miscellaneous) Act 2022 (NSW) Sch 1 cl 11): (2A) The Chief Commissioner may give an approval or exemption under this section at any time, even if - (a) the period of 12 months after completion of the agreement or transfer has already expired, or (b) the first home owner's occupation of the home as a principal place of residence has already ceased.
6. In July 2023, Parliament omitted the '6 months' period in s 76(1) and 76A(1) and instead inserted '12 months': First Home Buyer Legislation Amendment Act 2023 (NSW) Sch 1 cl 1. These amendments are not applicable to the applicant's 2017 purchase.
7. Section 76A of the Duties Act makes provision for the respondent to approve an application for a concession or exemption from duty under Division 1 in anticipation of the person complying with the 'residence requirement' in s 76. That section is in the following terms: 76A Approval of application in advance of satisfaction of residence requirement (1) The Chief Commissioner may approve an application in anticipation of compliance with the residence requirement under section 76 if the Chief Commissioner is satisfied that each applicant required to comply with the residence requirement intends to occupy the home as his or her principal place of residence for a continuous period of at least 6 months, with that occupation starting within 12 months after completion of the agreement or transfer or within a longer period approved by the Chief Commissioner. (2) If an application is approved in anticipation of compliance with the residence requirement, the approval is given on condition that, if the residence requirement is not complied with, the applicant must within 14 days after the end of the period allowed for compliance: (a) give written notice of that fact to the Chief Commissioner, and (b) pay the relevant duty to the Chief Commissioner. (3) The relevant duty is the difference between the total amount of duty that would have been payable on the transactions and instruments the subject of the application, if they had not been eligible under the scheme, and the total amount of duty (if any) paid in respect of those transactions and instruments. (4) A person who fails to comply with the condition prescribed by this section is guilty of an offence. Maximum penalty: 50 penalty units. (5) A failure to comply with the condition prescribed by this section is a tax default for the purposes of the Taxation Administration Act 1996.
8. Section 79 gives the Chief Commissioner the power to reassess the duty payable where a duty concession had been wrongly applied as follows: 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.
9. As can be seen from the terms of ss 76, 76A and 79, the power vested in the respondent in these sections are to some extent discretionary: see also s 9 of the TAA. Other than to note a discretion, the extent of and application of that discretion is not a matter for determination in this extension of time application.

The applicant's administrative review application

1. In his application for administrative review, the applicant said that his grounds for the application were: … Daracon required me to work away from home weekdays during a period in the FHBS when I was required to 'occupy' my property. I consider that I did occupy the property on days off and when working locally. I considered my property as my primary place of residence and my motel room working away as work accommodation. I would have lost my job, not completed my apprenticeship and subsequently lost my house if I refused to work away from my property. I was unaware of my employer requiring me to work away when I purchased it.
2. I understand that the applicant's contention is that he did meet the 'residence requirements' of the grant.

The respondent's s 58 documents

1. In his February 2022 objection to the respondent's assessment, the applicant identified his grounds of objection as follows (see s 58 docs. at Tab 44 p352): At the time of signing stamp duty agreement i did not know i was going to be sent away at scone to work as part of my job. [address] gateshead was my main location of residency after my work week as it was not practical and was not allowed to travel back and forth every day after 12 hour shift then commute 2 hours back home.
2. On 16 December 2021, the applicant completed and signed the respondent's pro-forma Residency Confirmation Statutory Declaration: see s 58 docs. at Tab 32 p 310. In that, declaration the applicant noted that he started residing on the Property on 2 July 2018 and stopped living in the Property on 3 January 2019. The applicant also responded 'No' to the question 'did you reside in the property with a third party under a lease, licence or arrangement at any given time?'
3. I note that, during 2018 and 2019 the applicant was employed by Daracon Engineering Pty Ltd (Daracon): see s 58 docs. at Tab 26 pp 278 and 288. He commenced employment with Daracon in mid-February 2016 and resigned from Daracon in September 2020.
4. In his application for employment with Daracon, the applicant identified his address as being in Pindimar in NSW: see s 58 docs. at Tab 26 pp 282. I note that Pindimar is about 80 kilometres north of where the applicant's Property is located (Gateshead in NSW). Gateshead and Pindimar are both about 2 hours drive from Scone in NSW.
5. In the investigation report of the respondent, at Tab 43 p 345, it is noted that the property in Pindimar is owned by ML Larkin and PA Larkin who the applicant had identified as his mother and father and next of kin in his 2016 application for a position with Daracon: see Tab 26 pp 278 and 282. At the time he made that application the applicant was 17 years of age.
6. The terms and conditions of Daracon's February 2016 offer of employment to the applicant as a trainee pipelayer included the following (s 58 docs. at p 290): 16. USUAL PLACE OF RESIDENCE As you are employed out of our Wallsend depot, you do not qualify for the living away from home allowance under clause 22 of the EA for work in that area. Should you be required to work on a project which makes it unreasonable for you to return to your usual place of residence then the living away provisions of the EA apply. We ask that you complete the declaration below confirming your usual place of residence.
7. A signed copy of Daracon's offer of employment is not contained in the s 58 documents. However, in its 24 December 2021 letter to the respondent, Daracon said that the applicant had only ever provided it with the Pindimara address as being his residential address: see s 58 docs. at Tab 26 p 278. Daracon went on to say that the applicant's PAYG statements would have been sent to this address or the applicant's email, which is the same email address he has provided in his administrative review application.
8. In the same letter, Daracon said that the applicant had worked away from home for a total of 118 nights (around 2018/2019).
9. In a subsequent email to the respondent, Daracon said (see s 58 docs. at Tab 28 p 294) that: Sam Larkin worked at Scone 5 or 6 days per week from 30 July 18 to 18 June 19, as per our records he stayed up there for a total of 118 nights.
10. In the investigation report, at p 344 in Tab 43 of the s 58 docs., the respondent notes that when the applicant purchased the Property it was tenanted by Compass housing. It was tenanted with a lease start date of 11 June 2010 and a vacate date of 8 June 2018. A tenant trust ledger report of Compass housing also noted that rent was received from the tenant from the date of settlement to 8 June 2018. The Property was next tenanted from 4 January 2019 to 2 January 2020.

Consideration

1. From the material provided, I understand the applicant to contend that: 1. at the time he purchased the Property (10 July 2017) he intended to occupy the Property as his principal place of residence for a continuous period of at least 6 months, with that occupation starting within 12 months after the completion the purchase of the Property; and 2. he did occupy the Property as his principal place of residence from the time the Property was vacated around 8 June 2018 to around 4 January 2019 when the property was re-tenanted.
2. As I have already noted, the onus is on the applicant to provide proof (evidence in the form of affidavit evidence, statements and/or documents) that support these contentions. In the event he does have evidence to support his contentions, I note the commencement of the contended occupancy falls within the prescribed 12 months after the settlement of the property which occurred in August 2017.
3. However, the onus is on the applicant to also prove that, during the contended June 2018 to January 2019 period, his occupancy of the Property was as his principal (main) place of residence. A person who has an exclusive right to the use and possession of a property does not make it the person's principal place of residence.
4. In this case, on the material provided to date, it is doubtful that the applicant will be able to establish that the property was his principal place of residence between June 2018 and January 2019, as, at the direction of his employer, he mainly resided in Scone during these months. The applicant contends that, at the time he executed the contract of sale for the Property that he was unaware that his position with Daracon would require him to work away from his intended principal place of residence, the Property. Again, this is something the applicant will need to prove and if he does so, the circumstances of his case may enliven the discretion in s 76(2)(b) of the Duties Act (an exemption from complying with the residence requirements).
5. Accordingly, it is difficult to find, at this early stage of the proceedings, that the applicant's application lacks merit. On the other hand, in my view, on the material before the Tribunal, the applicant may have an arguable case. The strength of that case is a matter for the applicant to determine, having regard to the applicable law and any further evidence or legal arguments he can provide to support his contentions.

Conclusion and orders

1. In summary, for the reasons set out above, I have found that the applicant's delay in lodging his application for administrative review is not insubstantial and that he has not provided an entirely satisfactory reason for that delay. At the same time, I find that it cannot be said that the applicant's application lacks merit, and the respondent accepts that he is not prejudiced if time were to be extended for the applicant to lodge his administrative review application.
2. In my opinion, on balance, time should be extended for the applicant to lodge his application for administrative review of the respondent's assessment decision, and I make an order accordingly. In making this finding I have placed considerable weight on the fact that the applicant was very young when he purchased the Property, the statutory intent of the First Home Buyers Assistance Scheme, the discretions vested in the respondent and it cannot be said, on the limited material before the Tribunal that the applicant's case lacks merit.
3. At the same time, as the applicant bears the onus to prove his case and there is no onus on the respondent to prove that his decision is correct, I encourage the applicant to seek urgent independent advice as to the evidence and legal arguments he will need to provide in support of his case should he decide to continue with his application. I also encourage the applicant to approach the legal representative of the respondent and explore whether the matter can be resolved to his satisfaction and that of the respondent.
4. Given the time of the year, it may take some time for the applicant to obtain the necessary advice. Hence, I have listed the matter for directions on 13 February 2024 at ???. The purpose of the directions hearing is for the applicant to indicate whether he withdraws his application for administrative review or proceeds with the application. In the event the applicant proceeds with his application orders will be made for the parties to file and serve their evidence and submissions.
5. In light of the applicant's previous failures to appear or respond to orders made, it should be noted that a failure by the applicant to appear at the adjourned directions hearing the Tribunal may make an order dismissing the applicant's administrative review application for want of prosecution under s 55(1)(d) of the Civil and Administrative Tribunal Act 2013 (NSW), unless the applicant is able to provide a satisfactory reason for that failure.
6. I make the following orders: 1. Pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013 (NSW), a hearing of the applicant's application for an extension of time is dispensed with. 2. Time for which the applicant is to lodge his administrative review application is extended to 11 September 2023. 3. The applicant's application is listed for directions on 13 February 2024 at 10:30 AM. Note: The purpose of the directions is for the applicant to advise whether he withdraws his administrative review application or proceeds with the application. Given the history of this application, a failure by the applicant to appear at the directions hearing the Tribunal may make an order dismissing the applicant's administrative review application for want of prosecution under s 55(1)(d) of the Civil and Administrative Tribunal Act 2013 (NSW), unless the applicant is able to provide a satisfactory reason for that failure.

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: 15 January 2024