Peng v Chief Commissioner of State Revenue

Leave to Appeal

1. The Civil and Administrative Tribunal Act 2013 (NSW) (CAT Act) provides, in s 80(2): (2) Any internal appeal may be made - (a) in the case of an interlocutory decision of the Tribunal at first instance - with the leave of the Appeal Panel, and (b) in the case of any other kind of decision (including an ancillary decision) of the Tribunal at first instance - as of right on any question of law, or with the leave of the Appeal Panel, on any other grounds.
2. Ground 2 of the grounds of appeal was intended to refer to s 12 of the FHOG Act, which relates to the 'residence requirement' which is a necessary pre-requisite to an entitlement to a first home owner's grant. The respondent understood that ground 2 was intended to refer to s 12 and dealt with the appeal accordingly. An arguable challenge to the interpretation of legislation is capable of raising a question of law. We will further address the question of whether a question of law is raised by ground 2 below.
3. Neither ground 1 nor ground 3 raise questions of law. Leave is required for the making of an internal appeal on those grounds. We will consider the question of whether leave will be granted below.

Ground 2 - the interpretation of s 12 of the FHOG Act

1. The FHOG Act, in Part 2, Division 2, sets out the eligibility criteria for applicants for a first home owner's grant. Criterion 5, the residence requirement, is set out in s 12 of the FHOG Act: 12 Criterion 5 - Residence requirement (1) An applicant for a first home owner grant must: (a) commence occupation of 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 the period approved by the Chief Commissioner under this section, and (b) occupy the home as a principal place of residence for a continuous period of at least 6 months or the period approved by the Chief Commissioner under this section. (2) This requirement is referred to in this Act as the residence requirement. (3) The Chief Commissioner may, if satisfied there are good reasons to do so, do either or both of the following: (a) approve the commencement of occupation by the applicant of the home to which the application relates as a principal place of residence more than 12 months after completion of the eligible transaction, (b) approve the occupation of the home as a principal place of residence for a period of less than 6 months. (4) The Chief Commissioner may, if satisfied there are good reasons to do so, exempt an applicant from the residence requirement. (5) An approval or exemption under this section may be given by the Chief Commissioner at any time, even if the period of 12 months after completion of the eligible transaction has already expired or the applicant's occupation of the home as a principal place of residence has already ceased. (6) If an application is made by joint applicants and at least one (but not all) of the applicants complies with the residence requirement, the non-complying applicant or applicants are exempted from compliance with the residence requirement.
2. The Tribunal referred to the property in relation to which the first home owner's grant had been paid as "the Grant property". The Grant property is in Hornsby NSW, and is a two bedroom home. The Tribunal said, at [26]: The following central facts appear to be uncontested: (1) that Mr Peng was the sole owner of the Grant Property at all relevant dates and times; (2) that he became the owner on 7 January 2016, being the date of completion of his purchase of the property; (3) that he occupied the Grant Property as his principal place of residence between February and May 2016; (4) that when returning to Australia from overseas on 3 separate occasions in May, July and November 2016 Mr Peng completed an arrival declaration (passenger declaration) in the form required by the Australian Border Force dated respectively 13/05/2016, 14/07/2016 and 10/11/2016 in each of which he nominated as his address a home unit in Burwood NSW (the Burwood unit).
3. The appellant took issue with the determination in paragraph 50 of the Tribunal's decision, which says: The section 12 residence requirement is that Mr Peng should reside in the Grant property as his principal place of residence for a continuous period of 6 months between 7 January 2016 and 17 January 2017. At the hearing, in his oral submissions, Mr Peng strenuously maintained that the property was his principal place of residence for that period.
4. The appellant argued that this interpretation of s 12 of the FHOG Act was in error. The appellant argued that s 12 required the commencement of the occupation of the home by the applicant for a grant to occur within the first 12 months of ownership, followed, at some later time, by continuous occupation for at least 6 months. In other words, the requirement of s 12(1)(b), that the applicant for the grant occupy the home as their principal place of residence for a continuous period of at least 6 months, does not need to be met entirely within the first twelve months after the completion of the eligible transaction. An eligible transaction is completed, under the FHOG Act, in the case of a contract for the purchase of a home, when the purchaser becomes entitled to possession of the home under the contract.
5. In the appellant's written submissions, it was argued: …so long as it is accepted that the Applicant commenced living in the property from (at the latest) 7 January 2017, and remained there for at least 6 continuous months, the requirement would be satisfied.
6. It became clear, during the argument before us, that the appellant was arguing that s 12 of the FHOG Act did not require the 6 continuous months of occupancy, by the applicant for the grant, to follow immediately after the commencement of the occupation of the home by the applicant. It would be enough to fulfil the eligibility requirement set out in s 12 of the FHOG Act, it was submitted, if the applicant commenced occupancy of the home within 12 months of becoming entitled to possession of the Grant property (in this case, 7 January 2016) and then, at any time after commencing occupancy, but prior to the expiration of an 18 month period beginning from 7 January 2016, completed a six month period of continuous occupancy of the home. The appellant argued that any period of continuous occupancy of the home by him for at least 6 months from 7 January 2016 to 7 July 2017 would satisfy the requirement of s 12 of the FHOG Act. The applicant could, it was argued, move in and out of the property a number of times during that 18 month time frame, and, if any of the periods of occupancy was continuous for at least 6 months, then the requirement of s 12 of the FHOG Act would have been satisfied.
7. The respondent pointed out that Mr Peng gave sworn evidence before the Tribunal that he commenced living in the Grant property on 7 January 2016, which probably formed the basis for the Tribunal's determination in paragraph 50 of its decision.
8. The respondent accepted, as a matter of statutory interpretation, that the requirement of s 12(1)(b) of the FHOG Act that the applicant occupy the home as a principal place of residence for a continuous period of at least 6 months does not need to be met entirely within the first 12 months specified in s 12(1)(a) of the FHOG Act. It must commence within that 12 month period, but may continue beyond the 12 month period. This is consistent with the decision in Wang v Chief Commissioner of State Revenue [2021] NSWCATAD 45 at [70].
9. The respondent argued that it is plain from the wording of s 12 of the FHOG Act that it is intended by the Act that the applicant for a grant commence occupation of the home as their principal place of residence within 12 months of settlement and then continue the occupancy so commenced for a continuous period of at least 6 months. This is the point of interpretation upon which the parties disagree.
10. We agree with the respondent. A plain reading of s 12 of the FHOG Act supports the interpretation argued for. The word 'and' at the end of s 12(1)(a) of the FHOG Act makes the two requirements (commencement of occupation and 6 months continuous occupation) conjunctive in time. The word 'This' in s 12(2) indicates that s 12(1)(a) and (b) together form a single requirement. Were it otherwise, the 6 month period of continuous occupation could occur at any time at all subsequent to the eligible transaction, as long as there had been some occupation as the principal place of residence by the applicant within the first 12 months after that transaction. This cannot have been intended. As the respondent argued, it would make the administration of the scheme by the Commissioner unworkable, as there would be no end point for the achievement of the residence requirement.
11. Mr Peng gave evidence before the Tribunal at first instance that he commenced occupation of the home on 7 January 2016 and moved out on 30 June 2017 to live with his fiancée or wife. That was his case in relation to his application for review of the decision of the Commissioner to require the repayment of the grant given under the FHOG Act. This was so notwithstanding that it was inconsistent with other statements he had made, and was also inconsistent with certain documentation, as set out in the decision at first instance, including documentation which showed that he had been receiving rent from two people during the relevant period. Mr Peng's evidence as to his occupancy of the home, and his explanations concerning his inconsistent statements, and the documentary evidence contrary to his oral evidence, was not believed by the Tribunal.
12. Mr Peng cannot now, on appeal, fundamentally change his case to say, in effect, that the Tribunal should identify at least one period of 6 months, among all of the different periods identified by the applicant in previous statements, to conform with s 12 of the FHOG Act.
13. When asked, in evidence, when he moved in to the home, Mr Peng said (transcript, p 11): First day, I write it down, on the 7th of January 2016.
14. Mr Peng was then asked when he moved out, after that date. He said: Yes. When I move out is about June - 30th of June 2017, yes, to my wife's place. Because I am engaged. I moved, just, really, for the marriage. That's why I move out. Yes.
15. The Tribunal at first instance was in error in paragraph 50 of its decision. The period within which 6 months of continuous occupancy needed to take place could not be identified until a finding had been made as to the date upon which the applicant commenced occupation. The period of time within which it was possible to fulfil the residence requirement in s 12 of the FHOG Act, hypothetically, was between 7 January 2016 and 6 July 2017, because the eligible transaction was completed on 7 January 2016, and not between 7 January 2016 and 17 January 2017, as the Tribunal indicated.
16. Notwithstanding that the Tribunal was in error in its interpretation of s 12 of the FHOG Act, that error had no impact upon the outcome of the administrative review. The Tribunal found that the applicant had failed to establish, on the balance of probabilities, that he satisfied the s 12 residence requirement (see paragraph 73). The Tribunal indicated that the evidence that, on 13 May 2016, 14 July 2016 and 10 November 2016, the Mr Peng made an Australian Border Force Passenger declaration, upon arriving in Australia by air, that his intended address in Australia was an apartment in Burwood, coupled with the evidence that his financial records showed that the majority of his consumer and entertainment expenditure was made in Burwood and the Sydney CBD, with very little expenditure in Hornsby, made it likely that he was, in fact, living in the Burwood apartment (see paragraphs 62-71).
17. The appellant argued, in summary, that the Tribunal had failed to consider whether Mr Peng might have occupied the home continuously from some time after 10 November 2016 until 6 July 2017. That was not a matter for the Tribunal to consider. Mr Peng's case before the Tribunal was that he had occupied the home continuously from 7 January 2016 to 6 July 2017. On his own case, therefore, the relevant six month period for the purposes of the residence requirement could only be from 7 January 2016 to 6 July 2016, and the Tribunal found that Mr Peng was living in the Burwood apartment on 13 May 2016. In all of his various accounts, Mr Peng has never said that he commenced occupation in November or December of 2016 or in January 2017. There was no evidentiary basis upon which the Tribunal could have entertained that possibility.

Should leave be granted for an appeal on grounds 1 and 3?

Ground 1

1. It is well established that the requirement for leave to appeal is a filter restricting access to the appeal process: Coulter v R (1988) 164 CLR 350; [1988] HCA 3 at 359 per Deane and Gaudron JJ, cited in Gaynor v Burns [2022] NSWCATAP 370;
2. The matters relevant to the question of whether leave to appeal should be given under the CAT Act in a matter such as this are set out in Collins v Urban [2014] NSWCATAP 17 at [84]: The general principles derived from these cases can be summarised as follows: (1) In order to be granted leave to appeal, the applicant must demonstrate something more than that the primary decision maker was arguably wrong in the conclusion arrived at or that there was a bona fide challenge to an issue of fact: BHP Billiton Ltd v Dunning [2013] NSWCA 421 at [19] and the authorities cited there, Nakad v Commissioner of Police, NSW Police Force [2014] NSWCATAP 10 at [45]; (2) Ordinarily it is appropriate to grant leave to appeal only in matters that involve: (a) issues of principle; (b) questions of public importance or matters of administration or policy which might have general application; or (c) an injustice which is reasonably clear, in the sense of going beyond merely what is arguable, or an error that is plain and readily apparent which is central to the Tribunal's decision and not merely peripheral, so that it would be unjust to allow the finding to stand; (d) a factual error that was unreasonably arrived at and clearly mistaken; or (e) the Tribunal having gone about the fact finding process in such an unorthodox manner or in such a way that it was likely to produce an unfair result so that it would be in the interests of justice for it to be reviewed, BHP Billiton Ltd v Dunning [2013] NSWCA 421 at [20] and the authorities cited there, SAB v SEM [2013] NSWSC 253 at [8] and [9] and the authorities cited there, Nakad v Commissioner of Police, NSW Police Force [2014] NSWCATAP 10 at [45]; …
3. The first ground of appeal is "The Tribunal erred by incorrectly weighing the competing evidence of the parties".
4. In the hearing, Mr Shamsabad was asked to identify the issue of principle raised by the first ground of appeal (transcript p14). His response was that the Tribunal's conclusion was "unreasonably arrived at and clearly mistaken" because it gave "little or no weight to the verification evidence which was voluminous".
5. The "verification evidence" was before us. It consisted of statements and correspondence from people who did not give evidence before the Tribunal. There were also electricity bills, bank statements, a letter from a home insurance provider, car registration notices, a photocopy of a heavy vehicle driver licence, car insurance documents, a NSW Transport confirmation of address history, a letter from NSW Fair Trading, accounts from an internet provider and correspondence from SMS Strata, all showing Mr Peng's address as the Grant property. There were immigration documents dated 28 June 2017 completed by Mr Peng, with his address as the Grant property. There was also an email exchange between Mr Peng and SMS strata concerning a request by Mr Peng "to turn my unit power on" at the Grant property. The emails show that the power was 'reconnected'. The date of that exchange was 25 February 2016. Mr Peng gave his address as the Grant property in his tax return dated 5 December 2016.
6. The Tribunal took into account the Commissioner's submission that much, if not all, of the documentation was consistent with the applicant's ownership of the Grant property, which is not disputed, but does not prove occupancy.
7. The Tribunal said, in relation to the "verification" evidence, at [55]-[57]: 55. The "verification" evidence produced by Mr Peng, such as electricity bills and car registration documents is of limited value and I give it limited weight. 56. Such documents are often produced by applicants in matters such as this. The obvious and substantial limitation on the weight and reliability of such evidence to establish "permanent residence" is that, as appears to be the case here, the evidence is often based on information provided to the utility providers or motor vehicle and similar registries by the applicant themselves. As Counsel for the Chief Commissioner submitted, for that and other reasons it is possible and indeed common for a bill (and, I would add a government record, for example the record of where a motor vehicle is housed) to record an address at which the person concerned does not permanently reside. 57. For those reasons I find Mr Peng's documentary verification evidence to be unreliable and of limited weight in determining the nature and period of residence at the Grant property.
8. The Tribunal took into account other, inconsistent statements from Mr Peng, in which he variously said that he occupied the Grant property from 1 June 2016 to 31 January 2017, May to November 2016 and February 2016 to August 2017. Before the Tribunal, Mr Peng gave evidence that he occupied the Grant property from 7 January 2016 to 30 June 2017.
9. The Tribunal said that Ms Zeng's oral evidence was of negligible value because she had no direct experience of where Mr Peng was living at any relevant time, but was relying, in her evidence, on what he told her.
10. The Tribunal said that the evidence of those people who provided statements was, to some extent, inconsistent, and the basis upon which the statements were made was unclear. Those people did not give oral evidence and were therefore not available for cross-examination.
11. The Tribunal took into account that Mr Peng's financial records show that he was collecting rent from at least two people during the period when he claimed to be in continuous occupation of the Grant property. The bank statements show rent going in to Mr Peng's account, but there are no obvious entries showing it going out to any other person, casting doubt on the evidence of Mr Peng that he was collecting rent for his aunt and uncle. Mr Peng conceded, in evidence, that there was at least one tenant of the Grant property in the relevant period. This was at odds with a previous statement made by him in the context of his grant application. The Tribunal rejected Mr Peng's explanations for the collection of rent.
12. The Tribunal said that the banking records provided by Mr Peng showed that his expenditure on retail items and domestic necessities occurred mostly in Burwood, which is about 20 kilometres away from the Grant property. The Tribunal noted that Mr Peng said that this was part of his "work lifestyle", to shop during a break in the working day.
13. The Tribunal took into account the Australian Border Force Passenger Declarations of 13 May, 14 July and 10 November 2016, on each of which Mr Peng responded to the question "Intended address in Australia?" with the address of the Burwood unit.
14. The Tribunal rejected Mr Peng's explanation that he thought that the appropriate answer to that question was "the address to which he would be proceeding from the airport". The Tribunal said that the explanation was "substantially unpersuasive" and strained credibility.
15. The analysis of the evidence by the Tribunal on the question of whether the applicant had discharged his onus of showing that he was in continuous occupation of the Grant property such as to satisfy the residence requirement under s 12 of the FHOG Act was thorough.
16. On appeal, Mr Peng's submission was that other Australian Border Force Passenger Declarations completed by him were not taken into account by the Tribunal. One of those gave an address in Ryde, and another, dated 14 June 2017, gave the Grant property. These documents were before the Tribunal. They were not specifically dealt with in the decision, but neither of them is sufficiently probative to have changed the weighing of the evidence, particularly as the Tribunal was considering the case presented by the applicant, which was that he commenced occupation of the Grant property on 7 January 2016. Mr Peng sought to rely on the Declaration which gave an address in Ryde as showing that he was truthful about misunderstanding the question on the form, but sought to rely on the Declaration which gave the Grant property address as showing that he was in occupation of that property on the date of the Declaration, which was 14 June 2017. There is an obvious contradiction in those submissions.
17. Ground 1 of the Notice of Appeal really amounts to a complaint that the Tribunal should have believed Mr Peng and given great weight to the "verification evidence".
18. No issue of principle arises from Ground 1. It does not give rise to any question of public importance or any matters of administration or policy having general application.
19. No injustice or error emerges from the Tribunal's analysis of the evidence.
20. No factual error that was unreasonably arrived at and clearly mistaken has been shown.
21. The Tribunal's fact finding process was not unorthodox or otherwise flawed. It is not apparent that it has produced an unfair result.
22. Leave to appeal on Ground 1 will be refused.
23. Had leave to appeal on Ground 1 been granted, Ground 1 would have failed.

Ground 3

1. Ground 3 is "The Tribunal erred by concluding that the Appellant acted dishonestly".
2. Before us, the appellant sought to make of this ground a challenge to the imposition by the Commissioner of the penalty under s 45 of the FHOG Act.
3. The appellant submitted, in his written submissions: [39] The Chief Commissioner imposed a $4,500 penalty under s 45 of the FHOG Act. This was given limited consideration by the Tribunal at first instance. We submit that the Tribunal incorrectly imposed this penalty, as no evidence of dishonesty was ever established by the respondent in relation to these matters.
4. The Tribunal did not, in fact impose the penalty, but did not set it aside, so that the penalty imposed by the Commissioner remains in force.
5. These proceedings began with the filing in the Tribunal of an Administrative review application form by the applicant on 3 December 2021. The grounds of appeal set out in that form were: 1. I meet the requirement for a First home buyer grant. 2. I have 4 witnesses who are willing to provide evidence and declare Hornsby apartment is my primary residence where I have been living, cooking and sleeping. 3. The supporting documents requested OSR provide the evidence I was continuously living in HORNSBY during 2016-2017.
6. The Administrative review application form contained no express challenge to the penalty imposed by the Commissioner.
7. The issue of the penalty was raised for the first time in the proceedings by the Tribunal in the hearing below at p 86 of the transcript.
8. The Commissioner pointed out that, prior to the hearing in the Tribunal, Mr Peng had given "multiple conflicting accounts" of when he had occupied the Grant property, including the following: 1. In a statutory declaration submitted to the Commissioner, Mr Peng described his period of residence as 1 June 2016 to 31 January 2017. 2. In a form submitted to Transport for NSW, Mr Peng described his period of residence as 13 January 2016 to 22 November 2016. 3. In his objection to the Commissioner's decision, Mr Peng described his period of residence as February 2016 to August 2017.
9. It was for Mr Peng to prove, on the balance of probabilities, that he satisfied s 12 of the FHOG Act. It was not necessary for the Commissioner to prove that he was dishonest in relation to that question, but only that he had failed to discharge the burden of proof. However, in the course of that exercise, Mr Peng gave an explanation for giving the Burwood address on three Australian Border Force Passenger Declarations which the Tribunal rejected. Mr Peng also gave an explanation for the appearance of payments of rent in his bank account and in his tax return which was rejected. The rejection of those explanations can only have been based upon a finding that Mr Peng's evidence was not credible. The Tribunal said, in its decision, at [70]-[71]: 70. I find Mr Peng's explanation as to his insertion of the address of the Burwood unit on the passenger arrival card on 3 separate occasions to be substantially unpersuasive and to strain credibility. 71. In light of the other evidence which suggests that his likely place of residence was the Burwood unit, a far more credible explanation is that in completing the passenger declaration on each of those 3 occasions, Mr Peng did in fact insert his actual residential address, which was the Burwood unit.
10. This amounts to a finding of dishonesty. The Tribunal was well aware that dishonesty was a pre-requisite for the imposition of a penalty (see p 86 of the transcript).
11. In relation to the payments of rent being received by Mr Peng during the relevant period, the Tribunal said, at [58]-[61]: 58. The Chief Commissioner contended that the documentary evidence (included in the section 58 documents) demonstrates that during the required period of residence Mr Peng received regular rent payments from at least two people. The records reveal many of the payments to be described as "rent". I understood Mr Peng initially to claim that this was rent he was collecting for his aunt in respect of a different property. But under cross-examination he confirmed that there was at least one tenant of the grant property. He conceded that he was unable to establish by any documentary evidence that the rent he had received had been for a property other than the grant property. 59. The grant property has two bedrooms. Although it seems possible that Mr Peng may have let out one bedroom and occupied the other bedroom himself, he has provided no verifying evidence of that. Such a possibility is not addressed in the evidence of his wife Li Zeng (even taking into account that, as noted above, they were not married until later) nor is it addressed by any of the friends or acquaintances of Mr Peng who provided statements, including those such as Mr Chen Li and Mr Zhihao Chen, who assert that they visited Mr Peng frequently at the property. 60. Mr Peng confirmed at the hearing that he had no further evidence to support the contention that he slept in one bedroom and the tenant or tenants in the other bedroom. He contended that further evidence on that was unnecessary and I should simply accept that he tells the truth. 61. I find that the account suggested by the Chief Commissioner as to the renting out of the grant property to be plausible and the version provided by Mr Peng, which is for the most part unsubstantiated, to be substantially less plausible. In particular, Mr Peng has failed to persuade me on the balance of possibilities that he continued to reside in the grant property during the period of any tenancy.
12. Again, this amounts to a finding of dishonesty by the Tribunal.
13. Immediately after hearing submissions on behalf of the Commissioner with respect to the penalty, the Tribunal told Mr Peng that he "now had the opportunity to say anything in reply". Mr Peng then made quite lengthy submissions about the evidence with respect to the residence requirement, but did not address the penalty directly. He did reiterate that he had made mistakes, and his accountant had made mistakes.
14. Notwithstanding that Mr Peng had not sought a merits review of the fact of the penalty or the amount of the penalty, he was given an opportunity by the Tribunal to address it, which he did not take up. No Browne v Dunn point arises (Browne v Dunn (1893) 6 R 67).
15. The Tribunal said, at [74]: 74. On the basis of my findings, particularly as to the credibility Mr Peng's account and the reliability of much of his evidence, which was for the most part similar to the evidence considered at the investigation stage by the Office of State Revenue, I find that it was open to the Chief Commissioner to decide to impose a penalty under section 45 of the FHOG Act and that the quantum of the fine was in the circumstances not unreasonable.
16. To summarise, both the Commissioner and the Tribunal had before them evidence which suggested that Mr Peng had been dishonest in relation to the question of whether he fulfilled the residence requirement, and both the Commissioner and the Tribunal formed the view, on the basis of that evidence, that Mr Peng had been dishonest.
17. Ground 3 does not raise any question of principle, nor any question of public importance, nor any matters of administration or policy which might have general application. There is no injustice which is reasonably clear, no factual error which was unreasonably arrived at and clearly mistaken and neither the Commissioner nor the Tribunal went about the fact finding process in an unorthodox way.
18. Leave to appeal on Ground 3 will be refused.
19. Had leave to appeal on Ground 3 been granted, Ground 3 would have failed.

Orders

1. We make the following orders. 1. Leave to appeal on grounds 1 and 3 is refused. 2. Ground 2 of the appeal is dismissed.

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: 07 December 2022