Miljus v Chief Commissioner of State Revenue - [2020] NSWCATAD 302 - NSWCATAD 2020 case summary — Zoe

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Miljus v Chief Commissioner of State Revenue

[2020] NSWCATAD 302

NCAT Administrative and Equal Opportunity|2020-08-27

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Court

NCAT Administrative and Equal Opportunity

Decision date

2020-08-27

Source

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Judgment (28 paragraphs)

[1]

What is this matter about?

This matter concerns the application of the "principal place of residence" exemption ("the PPR exemption") from liability for New South Wales land tax.
On 23 May 2019 the Chief Commissioner of State Revenue ("the Chief Commissioner") issued to Mr Milan Miljus, a taxpayer who owned several real estate properties in New South Wales, a reassessment of his land tax for the 2015 to 2019 land tax years, in accordance with a review which the Chief Commissioner had conducted of Mr Miljus' asserted right to a PPR exemption. By his decision to issue the reassessment, the Chief Commissioner effectively refused to apply the PPR exemption to a residential property owned by Mr Miljus in Erskineville, New South Wales ("the Erskineville property"), for the purpose of assessing his 2016 land tax liability. Effectively, the Chief Commissioner's decision confirmed that the Erskineville property was subject to land tax for the 2016 tax year
That decision of the Chief Commissioner is the decision under review in these proceedings. The proceedings were commenced by Mr Miljus' filing of an Administrative Review Application on 9 April 2020.
It fell to me to determine whether the Chief Commissioner's decision: 1. was the correct and preferable decision, in which case it would be affirmed; or 2. should be set aside or varied, in which case I also had to determine whether to make any of the orders available under sections 63 and 65 of the Administrative Decisions Review Act 1997 ("the ADR Act") in respect of the decision.
I decided that the Chief Commissioner's decision was the correct and preferable one and should be affirmed
These are my reasons for that decision.

[2]

Uncontested facts

The following facts were uncontested. 1. The facts set out at [2] and [3] above. 2. The only land tax year in dispute in these proceedings is the 2016 tax year, even though the reassessment issued by the Chief Commissioner on 23 May 2019 formally reassessed land tax for the 2015 to 2019 land tax years. 3. Mr Miljus' purchase of the Erskineville property apparently commenced in October 2015. Counsel for the Chief Commissioner indicated to me that it was undisputed that this transaction was in October that year. However the Chief Commissioner's written submissions indicated that Mr Miljus insured the property for residential building insurance with a commencement date of 9 December 2015 and the ATO records tendered as part of the bundle of documents lodged by the Chief Commissioner under s 58 of the ADR Act indicate that Mr Miljus commenced receipt of rental income from the Erskineville property on 31 October 2015. Although the exact completion date for the conveyancing transaction was not made clear to me, what seems most likely is that it occurred between late October and early December 2015. However what is clear and was not disputed is that the purchase was completed prior to 31 December 2015. 4. By a statutory declaration sworn by Mr Miljus on 14 June 2019 he declared that he was also the owner of a property in Shone Avenue Horsley NSW ("the Horsley property") which he had purchased in late 2012 and that: "… (that) address is my principle (sic) place of residence since (sic) 2014 until 2019 after I purchased the property in late 2012. 1. On 22 July 2019 Mr Miljus lodged with the Chief Commissioner an objection to his 2016 to 2019 land tax assessments again stating that his principal place of residence for those tax years was the Horsley property. His grounds of objection were in the following terms: "My principle (sic) place of residence is (the Horsley property) for the years 2016-2019, please refer to the attached phone bills and electoral roll documentation." 1. By declaration on the final page of that objection form, which was signed by Mr Miljus, he declared that: "….the information I/we have given is true, accurate and complete in every particular. I/we understand that penalties and/or prosecution may result if I/we provide false or misleading information." 1. The objection form dated 22 July 2019 attached tax invoices addressed to Mr Miljus at the Horsley property from Vodafone Network Pty Ltd and Australian Electoral Commission (AEC) enrolment data confirming his enrolment to vote at the Horsley property. 2. On 8 August 2019 Mr Miljus appears to have re-sent his objection form of 22 July 2019 to the Chief Commissioner with the following statement in a covering email: "Please find attached completed land tax objection form and supporting documentation… confirming my principle (sic) place of residence at (the Horsley property)." 1. On 12 September 2019 (that is, only some 5 weeks after confirming his assertion that his principal place of residence was the Horsley property) Mr Miljus lodged with the Chief Commissioner a document referred to as "a further objection", which sought the principal place of residence exemption for the Erskineville property for the 2015 to 2019 tax years. The 12 September objection listed the Erskineville property as Mr Miljus' "preferred address" and under the client details section of the form it did not indicate any different residential address for him. 2. That objection attached documentary material purporting to support Mr Miljus' contention that his principal place of residence since December 2015 (until at least the commencement of the 2019 tax year) had been the Erskineville property. That documentary material included: 1. 14 Energy Australia bills addressed to the Erskineville property and noting that property as the service address, with the date of the notices ranging from 16 March 2016 to 19 March 2019; and 2. 12 AGL gas account notices addressed to Mr Miljus at the Erskineville property and noting that property as the supply address, with the date of the notices ranging from 23 May 2016 until 16 August 2019. 1. On 14 October 2019 Mr Miljus responded to a request from the Chief Commissioner for further information by providing documentation which included an insurance policy, bank statements and "..other supporting documentation such as my PAYG summary, superannuation statements, additional gas bills, City of Sydney waste collection letter dated 3 July 2019, an e-parcel delivery receipt, invoices from Sydney Water and Council rate notices".

[4]

The principal place of residence exemption

An exemption from land tax liability is provided for in s 10(1)(r) of the LTM Act and the terms of the exemption are set out in clause 2 of Schedule 1A of the Act.
For convenience of reference the full terms of clause 2 are set out in the Appendix to these reasons, but essentially the clause provides that land used and occupied by land owners as their principal place of residence and for no other purpose is exempt from land tax for any year commencing 1 January 2005, provided that the land is a parcel of residential land, a strata lot or (subject to further provisions) land comprised of two or more strata lots.
Significantly, subclause (2) confirms that land will not be regarded as being used and occupied as the taxpayer's principal place of residence unless: "(a) the land and no other land has been continuously used and occupied by the person for residential purposes and for no other purposes since 1 July in the year preceding the tax year in which the land tax is levied; or (b) in any other case, Chief Commissioner is satisfied that the land is used and occupied by the person as the person's principal place of residence."
However, paragraph (b) of the subclause does not grant the Chief Commissioner a discretion to treat the subject property as the taxpayer's principal place of residence: see Chief Commissioner of State Revenue v Aldridge [2003] NSWADTAP 50. In that case, the Appeal Panel of the NSW Administrative Appeals Tribunal held that the clause does not confer a "true discretion" on the Chief Commissioner as to whether the land in question is at the relevant date is used and occupied by the taxpayer as the taxpayer's principal place of residence and that: "(if) the factual circumstances do not support (such a conclusion)…the Chief Commissioner cannot be 'satisfied' of that fact".
Aldridge is also authority for the propositions that: 1. it is implicit in the scheme of the LTM Act that the point of time at which the availability of the PPR exemption is to be determined is the moment in time at which land tax can be charged under the Act, namely midnight on 31 December of the year immediately preceding the year for which the land tax is levied (i.e. the relevant tax year); and 2. in order for paragraph (b) of subclause (2) to be attracted, the Commissioner must be satisfied that the land is used and occupied by the person as the person's principal place of residence at that same point of time: midnight on 31 December of the year immediately preceding the relevant tax year: see Aldridge at [12], [22], [26].

[8]

Identification of the real issue

The ultimate issue here was whether the PPR Exemption was available to Mr Miljus as taxpayer in respect of the Erskineville property, so that that property was exempt from liability for land tax for the 2016 tax year.
If the PPR Exemption was not so available, then the Chief Commissioner's decision on 23 May 2019 to issue his reassessment of land tax payable by Mr Miljus must have been the correct decision. I also had to decide whether it was the preferable decision.
As discussed above at [9] to [13], the PPR Exemption is not available; that is, land will not be regarded as used and occupied as the principal place of residence of the taxpayer, unless subclause 2(2) of Schedule 1A to the LTM Act is satisfied: see [11]. Subclause 2(2) consists of two paragraphs and if either of them is satisfied the land may be regarded as being used as the taxpayer's principal place of residence.
Paragraph (a) of that subclause does not apply here. It appeared to be uncontested that the Erskineville property was not used and occupied by Mr Miljus for residential purposes continuously from 1 July in the year preceding the relevant tax year; that is, from 1 July 2015. Mr Miljus did not assert that that was the case and it seems likely, as discussed at 7 above, that the conveyancing transaction by which the Erskineville property was purchased by Mr Miljus occurred prior to October 2015. Mr Miljus may have been let into possession prior to completion but it seems highly unlikely that the conveyancing transaction for the purchase of the property commenced as early as 1 July and he could not in any sense be said to have "owned and occupied" the property until (at the earliest) that transaction had commenced. There was nothing in evidence to suggest such an occurrence.
The effect of paragraph (b) of subclause2(2) of the Schedule, on the authority of Aldridge (discussed at [12] and [13] above), is that the PPR Exemption may be attracted if the Chief Commissioner is satisfied that the land was used and occupied as the taxpayer's principal place of residence as at the effective time for the assessment of liability for land tax generally, being in this case, midnight on 31 December 2015.
It followed that the real issue for decision was whether, as at midnight on 31 December 2015, the Erskineville property was used and occupied by Mr Miljus as his principal place of residence.

[14]

1.The relevance of Mr Miljus' documentary evidence to the 2016 tax year

Nearly all of the documentary evidence provided by Mr Miljus in support of his case did not relate to or establish his occupation of the Erskineville property during the 2016 tax year or, critically, that, as at midnight on 31 December 2015 he occupied and used that property as his principal place of residence.
For example, the documentation attached to his further objection of 12 September 2019, as described in more detail at 7 comprised Energy Australia bills and AGL gas accounts, the earliest of which was dated 23 May 2016. All of these related to usage during the 2016 year. None of them related to usage during the relevant tax year; that is the year ending on 31 December 2015. Accordingly none of this evidence advanced Mr Miljus' case. The same can be said for the material which he produced to the Chief Commissioner on 14 October 2019 including insurance policy documentation, bank statements and other documentation such as his PAYG summary superannuation statements and related utility notices.
There is a letter from Comminsure dated 30 November 2019 which appears to confirm that Mr Miljus insured the Erskineville property for residential building insurance (but significantly not for contents insurance) for $250,000, with a period of cover from 9 December 2015 to 9 December 2016. But that falls well short of satisfying the evidentiary onus: it does not establish Mr Miljus' personal use and occupation of the property as at midnight on 31 December 2015.
Another possible exception to my general conclusion above as to that evidence relates to and Energy Australia account for the Erskineville property covering supply from 10 December 2015 to 14 March 2016 (copied in the second section 58 Bundle at page 100).
Put at its highest, this document establishes that electricity was used at the Erskineville property during that period and that Mr Miljus was recognised by Energy Australia as its customer. However, it establishes little else. It does not establish Mr Miljus' use and occupation of the property as at 31 December 2015, because: 1. it is not clear from it what respective amounts of electricity were consumed prior to and on and after 31 December 2015; 2. the ATO records, particularly those in the second section 58 Bundle at page 55, show that Mr Miljus received rental income from the Erskineville property commencing on 31 October 2015; clearly a tenant could have been the electricity user; 3. the account, unlike all other Energy Australia accounts produced by Mr Miljus, is headed "Adjustment Note" and in the body of the document under the heading "Adjustments" appear the words "correction of past bill calculation". That and the format of the account generally suggests that it may be a record of an adjustment of electricity rates between two (or more) different users or Energy Australia account holders who occupied the premises in different periods. 4. Be that as it may, the Energy Australia account does not establish that it was Mr Miljus who used the electricity at the property on any particular date during the billing range; and 5. none of these doubts about the persuasiveness of the document has been answered by anything which is in evidence in these proceedings.

[15]

2.Mr Miljus' purported revocation and rescission of his declaration 22 July 2019

In paragraph 4 of his written submissions Mr Miljus addressed the fact that he had made a statutory declaration which asserted that his principal place of residence as at 31 December 2015 was the Horsley property but now asserted that it was in fact the Erskineville property. He said: "The incorrect statutory declaration by myself was revoked and rescinded and I don't allow my incorrect statement to be used by the respondent against me as it is simply not correct. I have already explained this to the staff at the Office of State Revenue and they agreed that it was incorrect and was not going to be used any further."
The statutory declaration referred to was that of Mr Miljus dated 14 June 2019, which I have covered in my description of uncontested facts at 7 above. In it Mr Miljus declared and affirmed that: "I am the owner of (the Horsley property) and this address is my principle (sic) residence since 2014 until 2019 after I purchased the property in late 2012."
A similar statement appeared in Mr Miljus' objection form dated 22 July 2019, although there he asserted that the Horsley property was his principal place of residence for the years 2016 to 2019. On 8 August 2019 Mr Miljus appears to have re-sent his objection form of 22 July 2019 to the Chief Commissioner by email and he referred to attached evidence as: "confirming my principle (sic) place of residence at (the Horsley property)".
Mr Miljus' attempt, by his written submission, to estop or in any other way prevent the Chief Commissioner or this Tribunal from taking these repeated assertions by him into account is ineffective.
Mr Miljus did not address this issue or address his purported reversal of evidence at the hearing, nor did he produce any documentary material in support of his contention that his repeated prior assertions (initially under oath) which clearly and unequivocally identify the Horsley property as his principal place of residence, were somehow mistaken or invalid or how that mistake or invalidity had arisen.

[16]

The evidence of Ms Hollis and Mr Graham was unpersuasive as to the real issue
Mr Miljus provided statutory declarations by two of his neighbours, Ms Rhondda Hollis and Mr Andy Graham, in support of his contention that he used and occupied the Erskineville property as his principal place of residence as at 31 December 2015. Ms Hollis and Mr Graham were required to attend the hearing for cross examination. They did so and were cross-examined by Counsel for the Chief Commissioner. They were not examined in chief or re-examined by Mr Miljus.
I accepted that both Ms Hollis and Mr Graham genuinely wished to assist Mr Miljus. However I gave reduced weight to their evidence and found that it was unpersuasive as to Mr Miljus' use and occupation of the Erskineville property as at 31 December 2015, for the following reasons: 1. The two statutory declarations were identical. Ms Hollis was asked in cross examination whether Mr Miljus had written the words in the statutory declaration for her and she responded that he had helped her with the form of the document which she had typed. When asked whether Mr Miljus had dictated the specific words in the declaration Ms Hollis responded to the effect that he had made suggestions as to the wording and she had agreed to them. I understood Mr Graham to indicate that the form of the statutory declaration was presented to him by Mr Miljus and that he had read it through and signed it. When Counsel asked Mr Graham whether he had had any opportunity to change any part of the document prior to signing it, he responded in the negative. All these factors reduced the forensic value, the persuasiveness and the reliability of the statutory declarations. 2. Both Ms Hollis and Mr Graham made observations (which in their statutory declarations were in identical form) that they had frequently seen Mr Miljus at the front of his residence, being the Erskineville property and walking around the neighbourhood and that this had been the case since he purchased the property. However, under cross examination neither of them was able to identify with any precision the date on which they had first observed Mr Miljus' presence. Ms Hollis said she could not remember exactly when Mr Hollis moved into the property but thought that it might have been between Halloween (31 October) and the Christmas holiday period in 1995. However when Counsel suggested that this could have been in early 2016, she responded to the effect that that was "not impossible". Mr Graham commenced by recalling with some certainty that he had seen Mr Miljus in and around the property from late October 2015 but conceded that he would have only seen him about once per week. However he later agreed with Counsel that he did not have an independent recollection that it was in 2015 rather than a later date that Mr Miljus first occupied the property.

[19]

63 Determination of administrative review by Tribunal (1) In determining an application for an administrative review under this Act of an administratively reviewable decision, the Tribunal 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. (2) For this purpose, the Tribunal may exercise all of the functions that are conferred or imposed by any relevant legislation on the administrator who made the decision. (3) In determining an application for the administrative review of an administratively reviewable decision, the Tribunal may decide: (a) to affirm the administratively reviewable decision, or (b) to vary the administratively reviewable decision, or (c) to set aside the administratively reviewable decision and make a decision in substitution for the administratively reviewable decision it set aside, or (d) to set aside the administratively reviewable decision and remit the matter for reconsideration by the administrator in accordance with any directions or recommendations of the Tribunal. 65 Power to remit matters to administrator for further consideration (1) At any stage of proceedings to determine an application for an administrative review under this Act of an administratively reviewable decision, the Tribunal may remit the decision to the administrator who made it for reconsideration of the decision by the administrator. (2) If a decision is so remitted to an administrator, the administrator may reconsider the decision and may: (a) affirm the decision, or (b) vary the decision, or (c) set aside the decision and make a new decision in substitution for the decision set aside. (3) If the administrator varies the decision: (a) the application is taken to be an application for review of the decision as varied, and (b) the person who made the application may either: (i) proceed with the application for review of the decision as varied, or (ii) withdraw the application. (4) If the administrator sets the decision aside and makes a new decision in substitution for the decision set aside: (a) the application is taken to be an application for review of the new decision, and (b) the person who made the application may either: (i) proceed with the application for review of the new decision, or (ii) withdraw the application.

Miljus v Chief Commissioner of State Revenue

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