Ms P.A. Neskovcin of Counsel, instructed by the Solicitor to the Commissioner of State Revenue

1. In March 2001 Mr Harold Shafer who is the attorney under power dated 13 February 1999 for the applicant in this proceeding, Ms Sharon Shafer, entered into a contract to buy 6 Walworth Avenue, Caulfield. The purchaser was described as 'Harold Schafer and/or nominee'. The property was subdivided prior to settlement. Settlement of the purchase took place on 30 July 2001. Mr Schafer's son Mr David Shafer took a transfer of Lot 1 and the applicant, Ms Sharon Shafer took a transfer of Lot 2 dated 30 July 2001 on which date the purchase was settled.
2. The purchase was funded in part from an inheritance that the two children received from the estate of their late grandmother and partly from loans made by Mr Harold Shafer.
3. As attorney, Mr Shafer completed an application dated 31 July 2001 seeking a grant under the First Home Owner's Grant Act 2000.
4. According to the records kept by the respondent, Commissioner of State Revenue, the application was entered into the computer system operated by the State Revenue Office on 1 August 2001 and designated 'approved' on 25 August 2001. The record shows that payment of the grant of $7,000 was made to an account in the name of Mr Harold Shafer on 28 August 2001.
5. Unit 2 was then let for a period of 11 months to Mr Penry-Williams and Ms Tregonning from 10 August 2001 to 9 July 2002.
6. According to Ms Shafer she moved into Unit 2 on 8 July 2002 having a removal company transport her belongings to the unit. A stove and a central heater were installed prior to her move in. On 10 July 2002 she arranged for electricity, gas, water and phone to be connected in her name. She says that from 8 July 2002 to 26 July 2002 she slept at Unit 2 each night, cooked and ate meals there each morning and some lunchtimes and most nights. She says she entertained friends and relatives at Unit 2, showered there and cleaned it, she paid a gardener to perform gardening services and 'read and amused myself at the property'. Ms Shafer had been studying architecture at the University of California at Los Angeles prior to her move in July 2002. She says 'on 26 July 2002 I went to the United States. I received an opportunity to do higher university study and work experience there.'
7. Her father and attorney Mr Harold Shafer said that on 11 July 2002 at 12.23 pm he telephoned the State Revenue Office and made contact with the Investigations Department speaking to an officer identified as 'Serena'. He said he asked that an inspector from the State Revenue Office call at Unit 2 to verify that the grant under the First Home Owner Grant Act had been properly paid and to inspect both units to verify that his son, Mr David Shafer and his daughter, the applicant in this proceeding, had moved in. He was told that an inspector would not be sent. He said that he sought clarification as to the residency requirement under the First Home Owner Grant but received no comprehensive statement being assured that if the applicant moved in this would be sufficient. In fact no inspector attended. Mr Shafer made a video of a visit to Unit 2 in July 2002 which he showed in the course of his evidence. It depicted his daughter, the applicant, in residence at Unit 2.
8. From 1 August 2003 Mr Penry-Williams and Ms Tregonning returned to the residence as tenants at Unit 2 where they remained until about a year ago. According to Mr Harold Shafer the rent derived from Unit 2 was credited to the loan account which his daughter, the applicant, had with him relative to the balance of the purchase price for the unit additional to her family inheritance.
9. On 23 August 2006 the Commissioner issued a notice purportedly in pursuance of Section 48(1) of the First Home Owner Grant Act by which he reversed the decision to pay the grant and required Ms Shafer to repay it because she did not meet the residency requirement. The notice referred to the decision to make the grant as having been made on 1 August 2001.
10. Ms Shafer objected to the Commissioner's determination to reverse the grant but by letter dated 21 November 2006 the Commissioner disallowed the objection. In a letter of 17 January 2007 Ms Shafer requested that the matter be referred to the Tribunal. The referral was made on 28 September 2010.

1. Section 7 of the First Home Owner Grant Act 2000 provided for the payment of a grant to an applicant who met the eligibility criteria where the transaction for which the grant was sought was an eligible transaction which had been completed. Amongst the eligibility requirements for applicants was the residence requirement. Section 12(1) provided:

(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 within 12 months after completion of the eligible transaction or a longer period approved by the Commissioner

(1) If the Commissioner is satisfied that a first home owner grant is payable on an application, the Commissioner must authorise the payment of the grant.

1. Section 23 authorised the Commissioner to vary or reverse a decision that he had made if he was later satisfied 'that the decision [was] incorrect'. A decision could not be varied or reversed under that section 'more than five years after it was made' (Section 23(2)). Section 25 provided for the Commissioner to notify an applicant of inter alia, the reversal of a decision and sub-section (3) required the Commissioner in the notice to 'state the reasons for the decision'. Section 48(1) provided inter alia:

(1) The Commissioner may, by written notice, require an applicant (or former applicant) for a first home owner grant to repay an amount paid on the application if -

1. Ms Shafer was represented by her brother, Mr David Shafer. He contended first, that the Commissioner's ability to reverse and reclaim the grant was constrained by Section 23 of the First Home Owner Grant Act which provides in sub-section (2):

A decision cannot be varied or reversed under this section more than 5 years after it was made ...

1. Section 23(1) authorises the Commissioner to correct or reverse a decision where he is satisfied that 'the decision is incorrect'. Mr Shafer noted that there was but a single notice of correction or reversal and that referred to a determination made on 1 August. Ex facie the decision to reverse had purportedly been made more than the five years after the original decision said to have been made on 1 August, therefore the reversal was ineffective he said. In any event he noted that Section 25 required the Commissioner to give notice of the decision and Section 25(3) it is provided that in the case of a reversal 'the Commissioner must state in the notice the reasons for the decision'. He said that in the notice itself no reasons were assigned. He said further that insofar as the covering letter might include any reasons, those reasons could not be taken into account because they are not stated 'in the notice' as required by the section.
2. In any event said Mr Shafer upon the evidence it should be concluded that Ms Shafer complied with the requirements of the statute. He noted that no minimum period of residency was required by the statute as it then stood. He referred to Chief Commissioner of State Revenue v Ferrington [2004] NSWADTAP 41. In any event he said that insofar as 'Serena' an officer of the State Revenue Office had told Ms Shafer's attorney, Mr Harold Shafer, that she only needed to move in to comply, the Commissioner should be estopped from going back on that assurance. He referred to a passage in Ms Shafer's objection where she said:

Had Serena stated that in order to comply I must remain at the property for two or three months (for instance), I would have considered delaying my departure accordingly, and remaining at the property to retain the $7,000 grant.

1. Ms Neskovcin of Counsel represented the Commissioner. She noted that the terms 'occupy' and 'principal place of residence' were not defined in the Act as it stood at the relevant time. She said that 'occupy' meant reside in the property and that the residence must be such that it is the person's principal place of residence or home requiring the occupation to be ongoing with an element of permanence. She referred to Bates v Chief Commissioner of State Revenue [2004] NSWADT 14 at [39]; Calai v Commissioner of State Revenue [2004] VCAT 756; (2004) 22 VAR 171, 173. She noted that in Boots v Commissioner of State Revenue [2004] VCAT 2549 [29] Senior Member Davis adopted the approach to construing the term principal place of residence which had been formulated in a decision of the New South Wales Administrative Decisions Tribunal in Chief Commissioner of State Revenue v Ferrington [2004] NSWADTAP 41; (2004) 57 ATR 170, 176-8. She referred to Mr Davis' summary of those principles as follows:

The six principles which the member adopted and with which I agree are as follows :

• the term should be given its ordinary meaning in the context in which it appeared;
• 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 the circumstances relating to the actual occupation of the dwelling;
• the intention of the person concerned, gauged objectively, is relevant but not determinative of the issue;
• 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 passing nature is not sufficient, nor is occupation for some other purpose;
• the short length of a person's residence, while relevant, is not determinative of the issue, as a short period of occupation may still have the requisite degree of permanence to it; although the fact that a period of actual occupation is short will make it harder to satisfy the requirement; and
• the reason for a person's departure from the home must be both reasonably and adequately explained when considering objectively in the light of the person's personal circumstances.

1. She said these principles had been adopted and approved in further Tribunal decisions both in Victoria and New South Wales. She referred to Mauro v Commissioner of State Revenue [2010] VCAT 1207; Goon v Chief Commissioner of State Revenue [2009] NSWADT 198; Savhani v Chief Commissioner of State Revenue [2009] NSWADT 198 and Chief Commissioner of State Revenue v McIlroy [2009] NSWADTAP 21 [44]-[45].
2. She said that the five year time limit under Section 23 of the Act was to be calculated by reference to when the decision was made. She said the material from the Commissioner's records showed that the decision was made at the earliest on 25 August 2001. She observed that by virtue of Section 44(1) of the Interpretation of Legislation Act 1984:

The five year period under Section 23(2) does not include the day the decision was made ... and therefore commenced the following day and ended, at the earliest, on 25 August 2006.

1. As to the arguments based on estoppel, she submitted that a taxpayer cannot invoke an estoppel against a taxation commissioner assessing tax pursuant to a statutory duty to do so. She referred to BBLT v Chief Commissioner of State Revenue (NSW) (2003) ATC 5063 at [111] per Gzell J. She relied on the long line of authority referred to by His Honour in support of the proposition. She said the same rule applied with regard to First Home Owner Grants. She referred to McTackett v Chief Commissioner of State Revenue [2003] NSWADT 154; (2003) 53 ATR 234 at [23] and Hiley v Chief Commissioner of State Revenue [2009] NSWADT 133 at [53].
2. She submitted that the residency requirement was not satisfied. She said Ms Shafer:

Has not produced any documents to support her case and substantiate that she occupied the property as her principal place of residence between 9 an 26 July 2002.

1. The period of occupation alleged she said was 'a short one'. Ms Neskovcin noted that the applicant did not advise VicRoads (the road licensing authority) that the property was her residential address. According to its records from 1996 to 2007 the applicant's residential address was shown as 610 Toorak Road, Toorak. Whilst the utilities were connected to the property in the applicant's name, the billing address was the Toorak Road address. She referred to the fact that the same tenants occupied the property from August 2001 to July 2002 and resumed occupancy in August 2002; she referred to a schedule from a rental agreement produced by the managing agent showing that in a document dated 5 July 2002 a commitment had been entered into for a new tenancy commencing 1 August 2002. She noted that the records as to rental bonds showed that the third party tenants' rental bond was shown as having been held continuously throughout the period without any break to allow for the occupancy of the applicant. She said that Ms Shafer described her departure as caused by 'an opportunity to do higher university study and work experience in the United States'. Ms Neskovcin said:

It seems implausible that overseas study could be organised at short notice or that the applicant did not intend to move to the United States for her studies at the time she allegedly moved to the property.

Therefore she said the requisite element of permanence was lacking for the residency requirement to be met.

1. Ms Neskovcin conceded that the notice demanding repayment of the grant referred to a decision made 1 August 2001. On the facts she said this was incorrect. She referred to a decision which I gave in Tsang v Commissioner of State Revenue [2007] VCAT 1819 at [15] where by reference to Project Blue Sky Incorporated v Australian Broadcasting Authority (1998) 194 CLR 355 I concluded that it was not Parliament's intention to invalidate the right of recovery which the Commissioner would otherwise have because of an irregularity in the notice. She said that the five year time limitation attached to the Commissioner's determination not to the service of any notice on the applicant, so if the notice did not reach the applicant until 28 August 2006 as Ms Shafer stated this would not defeat the Commissioner's claim for repayment.

1. I turn first to the substantial issue, namely whether or not in the present case the residency requirement has been met. In that respect I will be guided by the principles enunciated by the Administrative Decisions Tribunal of New South Wales in Ferrington's case as adopted by Senior Member Davis in Boots' case which principles have been applied repeatedly both in the New South Wales Tribunal and in this Tribunal. The most significant element of this formulation is that the presence of a person in a dwelling will only constitute occupation as a principal place of residence if there is a degree of permanence.
2. In my view the degree of permanence is entirely lacking in this case. First, the length of occupancy is almost absurdly short. The formulation in Ferrington's case shows that this is not in itself conclusive but a very brief occupancy is a factor to be considered as indicating a lack of permanence.
3. I accept the submission put by Ms Neskovcin that the work or study which Ms Shafer undertook in the United States of America from August 2002 onwards was unlikely to have been arranged at the drop of a hat. It seems plausible to assume that it was arranged even before she moved into Unit 2. This would be consistent with the existence of a tenancy agreement for the premises with Mr Penry-Williams and Ms Tregonning commencing 1 August 2002 but executed according to its printed term on 5 July 2002, that is, before Ms Shafer moved in. When cross-examined as to this document Mr Harold Shafer denied knowledge of it. He noted that the document had been prepared for execution by the managing agent on behalf of the lessor. Further, he observed that the document produced was an unsigned file copy. So much may be granted but the obvious inference is that the managing agent prepared this document well knowing and intending that as of 1 August Mr Penry-Williams and Ms Tregonning would resume their tenancy. The managing agent, albeit through the medium of Mr Harold Shafer as attorney was ultimately the agent of the applicant. There is no reason to think that the preparation of this document was some sort of 'rogue' action by the agent. It follows therefore that when she moved into Unit 2 in July 2002 with a commercial tenancy about to commence on the first of the following month, there was neither objectively nor subjectively any intention on the part of Ms Shafer to make Unit 2 her principal place of residence.
4. I am fortified in these conclusions by the lack of any reference to Unit 2 s being Ms Shafer's address on documents such as utility bills and her driving licence. Further, the rental bond seems to have been held continuously for Mr Penry-Williams and Ms Tregonning for a period running right across July 2002 showing that they were having a brief 'holiday' from Unit 2 rather than yielding it up to somebody else, namely the applicant to use as her principal place of residence.
5. I now turn to the issues of form and process. The submissions by the parties assumed that the document styled Notice Under Section 48(1) Requiring Repayment of Grant over the signature of 'Simon Andrew O'Keefe, Team Leader Investigations Branch' and dated 23 August 2006 was a notice for the purposes of Section 25 of the Act. It was criticised as such by Mr David Shafer for its lack of reasons. In my view this document is what it purports to be, a notice requiring repayment under Section 48. It is not and does not purport to be a Notice Under Section 25 of the Act communicating the reversal of a decision to pay the Home Owner's Grant. That document is a letter dated 23 August 2006 which seems to have been despatched in the same envelope and which was referred to in submissions by Ms Neskovcin as the 'covering letter', that is, a letter covering the Notice Under Section 48. Ms Neskovcin noted that there is no form stipulated for the notice of reversal of decision provided for in Section 25 of the Act. There is therefore no reason why that notice cannot be in the form of a letter. In my view that is what the letter of 23 August 2006 is. It states:

Based on the information you have voluntarily provided, it has been found that you did not meet the residency requirement contained in Section 12 of the First Home Owner Grant Act 2000 (the Act). This is due to the fact that you did not occupy the purchased property as your principal place of residence within 12 months of becoming entitled to possession of the property.

1. The explanation is brief but it is sufficient to constitute a statement of reasons for the purposes of Section 25 of the Act. The contention put by the applicant that there has been a breach of Section 25 in this case cannot be accepted.
2. It is also to be noted that the letter as distinct from the notice under Section 48 does not nominate any date for the decision which is said to be reversed. I am prepared to assume in favour of the applicant however that the inclusion of the sentence in the letter:

I enclose a notice under Section 48(1), of the Act, which reverses the decision to pay you a First Home Owner Grant, and requires you to repay the amount of the grant being $7,000.

Constitutes incorporation by reference of the description of the decision as having been made by 'Mr Barry Emsle of the State Revenue Office of Victoria on 1 August 2001'. In similar circumstance in Tsang v Commissioner of State Revenue [2007] VCAT 1819 at [15] I decided based on the decision of the High Court of Australia in Project Blue Sky Incorporated v Australian Broadcasting Authority (1998) 194 CLR 355 that a non-compliance with the First Home Owner Grant in failing accurately to describe the decision which was being reversed was not of such a character:

That Parliament would intend that if the Commissioner or otherwise had an appropriate right of claw back that it should be invalidated simply because the wrong dates for the decision had been included in the relevant notice.

1. As to the estoppel contended for, there are a number of reasons why this should not be accepted. First, it seems to me at least open to doubt that the applicant would really have delayed her departure to the United States based on what her father was told by the State Revenue Office. I accept what Ms Neskovcin has said to the effect that whatever work or study arrangements were made in the United States were likely of longstanding and would not easily have been disturbed. Secondly, I do not believe that it would be reasonable in the circumstances to regard what the relevant officer in the State Revenue Office said as being sufficiently unequivocal to ground an estoppel. Just what constitutes compliance with the residency requirement as it stood in 2002 is as cases such as Ferrington's show, a matter of some complexity. A caller could not reasonably expect to receive a comprehensive exposition on such a matter from an officer who likely is not a qualified lawyer simply in response to a telephone query.
2. More pertinently as the seminal judgement of Gummow J as a member of the Full Court of the Federal Court of Australia in Kurtovic v Minister for Immigration and Local Government and Ethnic Affairs [1990] FCA 22; (1990) 92 ALR 93 demonstrates, estoppel by representation generally has no application in public law because of the obligation of all involved to observe the terms of the law and of the statutory officers to perform their duties under statute. The revenue cases to similar effect relied on by the Commissioner are the particular examples of that general principle. See also Page v Manningham City Council [2010] VSC 267 [66].
3. It follows that the respondent's determination should be confirmed.