The decision of the Respondent is confirmed except for the penalty which is reduced to $1,000.00.

These written reasons consist of an edited transcription of reasons given orally at the conclusion of the hearing.

1. In this proceeding, the applicant seeks a review of a decision made by the respondent on 7 May 2015 to affirm the reversing of an earlier decision in relation to a First Home Owner Grant. On 23 February 2011, the applicant was paid a First Home Owner Grant which comprised a base payment of $7,000, a bonus payment of $5,000 and a boost payment of $14,000 pursuant to s.18 of the First Home Owner Grant Act 2000 (Vic) (the "Act").
2. In reversing the decision and requiring the repayment of the money, the Commissioner also imposed a penalty of $2,600. The Commissioner now only seeks that that penalty be $1,500. These proceedings were referred to this Tribunal by the respondent at the request of the applicant.
3. In this proceeding, like many other First Home Owner Grant proceedings that come before the Tribunal, the dispute is in relation to Criterion 5 of the eligibility criteria contained in the Act. That criteria is referred in s.12 of the Act which states as follows:

(1) 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 for a continuous period of at least 6 months (or the lesser period approved by the Commissioner) commencing within the 12 month period immediately after completion of the eligible transaction or within a longer period approved by the Commissioner.

1. I note here that it is common ground that the commencement of the period for the eligible transaction is 25 February 2011 when the relevant property settled. The background to this matter is that on about 23 March 2009, the applicant made a purchase off-the-plan of an apartment which was then described as Lot 186, 367 - 369 Burwood Road and 1 Glenferrie Place, Hawthorn. The purchase price was $256,000. The property that I have just described is now known as 'Apartment 1007' (the "property"). The property is a student accommodation apartment which was described by the applicant as being similar to, or a bit smaller than, a double garage. The property was sold to the applicant with notification of a condition in the planning permit which permitted the property be built. That condition was pursuant to s.173 of the Planning and Environment Act 1987 (Vic). That condition confined the use of the apartment to student accommodation although it allowed for a parent or a visitor to occupy it for a short period of time. Apparently the student accommodation could also be occupied by a teacher.
2. At the time that the applicant signed the contract for the apartment, he was aware of the condition in the planning permit to which I have referred. The applicant said, in his evidence, that he expected the settlement to take place a lot earlier than it did. However, the documents which were produced to the Tribunal today suggest that that is not quite correct. As I have previously said, the settlement of the property took place on 25 February 2011 which is the relevant commencement date for s.12 of the Act. The applicant states that he resided in the premises from 25 February 2011 until 30 August 2011. I pause the narrative here to make a number of points.
3. The applicant was enrolled in the course he was doing in July 2010 and always expected to complete the same by December 2011.
4. The applicant, certainly prior to the application for the First Home Owner Grant and prior to settlement, became engaged to the person who is now his wife. That engagement took place in January 2010. There was apparently some discussion between the applicant and his now wife as to whether they would move into the apartment. However, it became clear, in my view, that fairly soon after the engagement the applicant would not live in the apartment with his now wife. It was plain that he was to get married on 10 September 2011. As a consequence he moved out of the apartment on 30 August 2011 in order to prepare for his wedding. It was a tradition in his family that he should leave from his parents' home to be married and so he left the apartment 10 days prior to the marriage and resided in his parents' home.
5. Prior to residing in the property and subsequent to residing in the property the applicant resided in the home occupied by both one set of his grandparents and his own parents in Noble Park. I understand that his other set of grandparents also occupied a house in Noble Park in the same street.
6. It was in those circumstances that the applicant moved into the property. The first matter in dispute in these proceedings is "when did the applicant move into the property"? The applicant says that he moved into the property on 25 February 2011. Giving evidence today, he suggested that it could have been 26 February 2011. In my view, it makes no difference. The real problem in this matter is "when did the applicant first really move into the property"? It has been submitted by Ms Baker, on behalf of the respondent, that the applicant did not in fact move into the property, so as to reside in the property, until 9 March 2011. The applicant conceded that there was no water whatsoever in the property until 9 March 2011. It was made quite clear by the applicant that if the tap was turned on, no water came out, likewise the toilet did not flush. Clearly water was not connected. The applicant was cross-examined about his occupation during that time. He said he moved his belongings into the property. When questioned about water usage, including the toilet, he said there were toilet facilities on the sixth floor of the building which were able to be used. His property was on the tenth floor. He said that he only used those toilet facilities on a couple of occasions during the period between 25 February 2011 and 9 March 2011. I find it quite extraordinary that someone living in a property without water would be able to survive in such property for any period of time. That is, to reside in the true sense of the word. I find this particularly so in light of the fact that the applicant had comfortable accommodation which was provided for him and which he could still use at his parents' and grandparents' home in Noble Park. He returned to that house in Noble Park after he had left the property in Hawthorn.
7. Bearing all these fact in mind I find that the applicant did not commence residence in the property until 9 March 2011. He may well have moved some clothes into the property around 25 February 2011and may well have even spent some time at the property; but I do not accept the fact that it was likely that he slept there on a regular basis. He said that there were some nights when he slept at his parents' or at his fiancee's property. In my view it is likely that he slept all the nights at those other places between 25 February and 9 March 2011. I find that he did not reside at the property at all during the period between 25 February 2011 and 9 March 2011. That matter in itself is sufficient to decide this case because that would mean that the applicant was at the property for less than six months. However, if I am wrong on that matter I think it is desirable that I should make findings on the other matters that were put before me at this hearing.
8. The applicant said that while he resided at the property his laundry was always done at his mother's house. He said it was taken there once a week and his mother would wash and iron his clothes. His laundry was not done at the property. I noted in the case of Bishop v Commissioner of State Revenue [2016] VCAT 239 at [25] that in a similar situation it was possible for laundry to be done not in the actual property itself but in the common laundry of the apartment. In my view it would be quite possible for someone who was residing in the property to do their laundry in the laundry at the property or at a commercial laundry laundromat. However the applicant chose to maintain his link with his parents' home in this respect. The applicant admits that he did not really cook any meals at the property, owing to the cooking odours becoming intolerable: so he ate most of his meals at his parents'/grandparents' place, his other grandparents' place or at his fiancee's place in Mount Eliza or occasionally had take away food at the property from his parents' home.
9. It is also clear that the applicant only intended to reside at the property for a finite period. That is, at all relevant times the applicant was intending to leave the property after December 2011 when he would finish his course. It was intended after that time that the property would be rented as an investment. He was unable to stay at the property after December 2011 because he would not have been a student and would have been in breach of the planning conditions to which I have referred. Further at least as early as the time that the applicant made his application for the First Home Owner Grant, around September 2010, it was clear that he did not intend to reside at the property. He intended to move out of that property when he was married which would have been the following September.
10. On 28 July 2011, the applicant sent an email to the managers of the apartment block, called 'Unilodge Vivida', stating that he wanted the apartment rented out as soon as possible and that his address would now be 10 Ripon Court, Noble Park North, i.e. the address of his parents'/grandparents' house. I note that a tenant moved into the property on 18 October 2011.
11. In relation to the applicant's use of water and electricity, it is quite clear that the water use is less than what is normally regarded as a minimal use, and the use of electricity was very small indeed. Ms Baker suggested that the electricity use was no more than a refrigerator that was built into the property under a bench. It was approximately 0.3 - 0.4 kilowats per day, that is small usage. The applicant explains this small usage of utilities on the basis that he was frugal and he wanted to save money to get married. Further he stated that he showered most days either at the gym or at work and he ate his meals elsewhere as previously described above. Thus, he said, he had not much use for electricity and even stated that at one point he thought about not having his electricity connected.
12. I also note that the applicant did not change his mailing address while he was at the property. His mailing address remained that of his parents/grandparents in Noble Park - e.g. for his driver licence and other documents. I note that the Nobel Park mailing address was also used for new correspondence. He informed Unilodge Vivida that that was the place for his mail to be sent. He said this was because there was a very poor mail receiving facility at the property and that he had travel commitments and he was frequently at his parents' house. In my view this illustrates that his real connection was at his parents' home. I also note that the applicant's bank details make it clear that there were very few transactions around the Hawthorn area - Ms Baker suggested that this was as low as 4. There were a few transactions around the Chadstone area which are in close proximity to Hawthorn. However there were many transactions around Noble Park, Mount Eliza and Mornington. The applicant said that his fiancée had used his credit card.
13. I also note that the applicant when he purchased the property applied for a loan of $152,000. That was an owner/occupier loan. In order to be able to complete the settlement he also obtained an investment loan of $48,000 which was guaranteed by his parents. He said on those documents (the investment loan documents) that he did not intend to reside at the property. He said that when it was pointed out to him that he had made that statement on that document that he was unaware that it was there.

1. In order to determine whether the applicant has resided at the premises as his "principal place of residence" for the period which he has stated given the circumstances which I have mentioned above, I make reference to the decision of the New South Wales Administrative Decisions Tribunal Appeal Panel in Chief Commissioner of State Revenue v Ferrington [2004] NSWADTAP 41; [2004] 57 ATR 170. I note that that case is referred to in most First Home Owner Grant cases that come before this Tribunal. There are six relevant principles, as follows:
   • (a) The words "principal place of residence" should be given their ordinary meaning in the context in which they appear.
   • (b) Consideration of whether a person has been residing or occupying premises as their principal place of residence is to be assessed objectively in the light of circumstances relating to the actual occupation of the dwelling.
   • (c) The intention of the person concerned, gauged objectively, is relevant but not determinative of the issue.
   • (d) To occupy a home as his or her principal place of residence a person's occupation must have a degree of permanence to it: a connection to a place of residence of a transient, temporary, contingent or a passing nature is not sufficient, nor is occupation for some other purpose.
   • (e) The short length of a person's residence, while relevant, is not determinative of the issue.

This is so since the recipient's occupation of a home, while short, may have requisite degree of permanence to it; but that will not happen if we consider objectively the place of residence to be of a transient, temporary, contingent or passing nature. If a period of occupation is short, it will make it harder for a recipient to show that the occupation was as his or her principal place of residence but it might not make it impossible.

(f) The reasons for a person's departure from the home must be both reasonable and adequately explained when considered objectively in the light of their personal circumstances.

1. It has been made clear by the cases that in the first Ferrington principle no technical meaning should be given to the words "principal place of residence" as contained in section 12. I refer to Baklis v Commissioner of State Revenue (Taxation) [2012] VCAT 1980 [35]. It should have its natural and ordinary meaning. The Act requires that the applicant's occupation of the property must have been ongoing with an element of permanence.
2. I now turn to the second Ferrington principle, that is whether the applicant has occupied the property as his principal place of residence must be assessed objectively in light of the circumstances relating to the actual occupation. That is, a reasonable man's standard should be applied. As I have said in other cases, "would an outsider looking in think that the applicant was residing in the property as his permanent place of residence"?
3. In this particular matter, in my view, there are a number of factors that would suggest that the applicant would not be seen to be residing in the property as his principal place of residence.
4. It would appear to me that at best the applicant slept at the property and ate an occasional meal there. He kept some clothes there. His laundry was not done at the property, nor was his cooking; he ate most of his meals elsewhere.
5. It was always intended that the applicant would move out of the property as it was student occupation. He could only occupy it while he was a student. I note that there were rental guarantees for investors.
6. Looking at these matters, it would suggest to me that the applicant's residence of the property was not permanent, it was rather transient, temporary or of a passing nature.
7. The applicant knew certainly at the time that he applied for the Grant that he would be moving out before he got married in September 2010. During the occupation of the property he asked that the property be rented as soon as possible. That request was made on 28 July 2011.
8. There was no unknown supervening event that caused the applicant to leave the property. At the time he applied for the Grant he knew that he was going to get married and leave and knew that he could only stay there as long as he was a student.
9. At all times an outsider in my view would consider the applicant's permanent place of residence to be Noble Park, that is the place where he seemed to spend a great deal of time and where he had his basic connection. He ate his meals there, he had his laundry done there, he had his mail delivered to that address.
10. I now turn to the third Ferrington principle. That is, the intention of the applicant gauged objectively which is relevant but not determinative. As I have previously stated it was the applicant's intention only to stay in the property until September 2011 or, at the latest December 2011, when he completed his course. The fact that the student accommodation makes it very difficult in my view for an applicant to obtain a First Home Owner Grant. That is, with the planning condition that a person must be a student in order to occupy the premises. That is because people are only students for finite times. I also note that teachers are permitted to occupy the property which could be an exception because a teacher could occupy the property for an indefinite time. I do not attempt to define all the other circumstances where a First Home Owner Grant could be extended to student accommodation. I agree with what I have said in Bishop v Commissioner of State Revenue [2016] VCAT 239 [26]; there I said:

[26] The third Ferrington principle relates to intention. As I have mentioned it is clear that the Applicant only intended to occupy the premises until the middle 2012. That is putting it at the highest. Or put a different way, he could only occupy the premises while he was a student. Therefore, it necessarily follows that there was lacking a degree of permanence in his intention. His intention was to occupy these premises for a short and finite period. Whether that period be for 6 or 12 or 18 months in my view it does not matter it was always his intention to leave these premises and as such that cannot be his principal place of residence.

1. What I said there applies exactly to the present case. I also note that it was the applicant's ultimate intention to use the property as an investment property which is inconsistent with the principle of occupying the property as a principal place of residence. See Baklis v Commissioner of State Revenue (Taxation) [2011] VCAT 1980 [37]:

An applicant's intention to occupy the property for a short period of time using the property as investment property was inconsistent with an intention to treat the property as his principal place of residence.

1. Here the applicant moved into the property knowing that he would be moving out within a relatively short period of time and as I have said at the latest December 2011 but more than likely in September 2011. Even if the applicant moved into the premises with the intention of living their permanently as his permanent place of residence in this particular instance the applicant formed an intention to move out of the premises as early as 28 July 2011. I refer again to the email to the managing agents where he asked them to lease the property as soon as possible.
2. It was at that time that there would have been a change of intention, if there ever was an intention to reside in the property as a permanent place of residence.
3. The fourth Ferrington principle concerns whether the occupation is of temporary, transient or passing nature. In this particular instance I have said the applicant moved in with the intention of moving out in September 2011 and was required to move out by 5 December 2011 because he would no longer have been a student. Further, I make note of the fact that the applicant had continuing association with his parents and grandparents house and he seemed to have all the facilities there that I mentioned. All the usual work that is usually done at a principal place of residence was done for the applicant at that house. This also included his personal mail delivery.
4. This is not dis-similar to a situation which Judge Macnamara had to deal with in D'Amelio v Commissioner of State Revenue (Taxation) [2012] VCAT 265 [16]. There the applicant ate, showered and washed at the home of his parents-in-law. His Honour stated at [16]:

[16] ...I should report also that in my view if she did no more than what is alleged, that is sleep at the property and carry out all of the significant elements of her life elsewhere, that would not in my view objectively amount to occupancy of the premises as a principal place of residence in accordance with the Ferrington principles.

1. Thus I conclude that the applicant's occupation of the property was temporary and contingent and the fourth principle is not satisfied.
2. The firth principle refers to the period of short occupation. In this particular instance, it is not as important as it used to be because now the period is defined in the Act - i.e. six months within the first twelve months. However, in this particular instance, it is noted that even on the applicant's own case the period of occupancy is six months and 4 days it is just 4 days over the required period. In my view that is transient, temporary, contingent and of a passing nature.
3. The sixth Ferrington principle concerns the applicant's departure from the property. In this particular instance there is no supervening Act. The applicant did know before he obtained the grant that he would be departing from the property because he was getting married in September 2011. He knew about that when he applied for the First Home Owner Grant. There may be some doubt as to whether he knew about that when he signed the contract, which was an off-the-plan purchase, and which contract was signed in 2009. However, even when he signed the contract he would have known that he could not have continued to reside in the property after he ceased to be a student.
4. Thus having taken all these matters into account I am of the view that the applicant has not fulfilled the requirements of S.12 of the Act and thus the decision to repay the Grant must be upheld. It will also be remembered that in any event I have found that the applicant's occupation of the property was less than six months.

1. I now turn to the question of penalty. The penalty that was imposed in this matter was $2,600 being 10% of the grant, which is the usual penalty in First Home Owner Grant cases. I also note that the respondent has referred to Gravina v Commissioner of State Revenue [2013] VCAT 347 [33] which sets out the principles in relation to whether a penalty should be imposed.
2. The first principle is the truthfulness of the original statement made by the applicant. I found the applicant to be relatively truthful witness except in relation to the time that he actually moved into the premises. In relation to the surrounding circumstances, which is the second principle, including the intention, I find that the student accommodation is quite difficult for people to understand particularly as at the time there were no decided cases on this point.
3. The reason the applicant failed to comply with conditions because he did not occupy the premises for six months within the first twelve months nor did he intend to do so. In response to Ms Baker's questions, the applicant's responses were satisfactory. The applicant has refunded the money and he has paid that back and did so quite quickly. I also note that penalty needs to be a deterrent.
4. The respondent has suggested that the penalty should be reduced to $1,500 which is the same penalty that I imposed in the Bishop's case. I think it is proper that there should be similar penalties for similar situations. I believe this case has one more factor in the applicant's favour, in that the applicant has repaid the money. In those circumstances I will vary the decision of the respondent and reduce the penalty to $1,000.

1. Thus I conclude that the decision of the respondent will be confirmed except for the mater of penalty which will be amended to $1,000.