Theophilas v Chief Commissioner of State Revenue

Material before the Tribunal

1. The Respondent relied on 1. a bundle comprising 277 pages of documents filed with the Tribunal on 15 April 2015 pursuant to s 58 of the Administrative Decisions Review Act 1997 (the s 58 documents); and 2. written submissions dated 3 July 2015 and oral submissions to the Tribunal by Ms Sethi who appeared for the Respondent.
2. The Applicant relied on: 1. the Application for Exemption and Notice of Objection against Assessment, both dated 30 March 2014; 2. the grounds for the Application to the Tribunal filed 31 October 2014; 3. affidavits sworn by the Applicant on 29 April 2014, 1 May 2015 and 9 July 2015, respectively referred to as the Applicant's first, second and third affidavits; 4. written submissions dated 1 May 2015 (AS) and submissions in reply dated 10 July 2015 (ASR); 5. a letter from Mr McMillan, who appeared for the Applicant, to the Tribunal after the hearing, dated 16 July 2015 and received 17 July 2015; and 6. oral submissions to the Tribunal by Mr McMillan.

The Applicant's case

1. The Applicant's case was summarised at [3] to [6] in AS. It is that the Applicant intends to resume residence at the Randwick property as soon as rebuilding his house is complete and he is entitled to the benefit of the concession provided for in clause 6 of Schedule 1A of the Land Tax Management Act 1956 (LTM Act).
2. In the 2013 proceedings it was determined that a property owned by the Applicant at Panania (the Panania property) was, on the facts at the taxing date for the 2013 tax year, the Applicant's principal place of residence. It was also accepted that the Applicant's intention was that he would ultimately reside at the Randwick property. However the determination concerning the Panania property activated clause 6(7) "which disentitled Randwick from the principal place of residence exemption. That clause was construed according to law" and consequently the unoccupied land concession provided by clause 6(1) did not apply to the Randwick property in respect of the 2013 tax year. (the 2013 decision at [72] and [73] and the appeal decision at [89] and [90]).
3. The issue in these proceedings is whether in respect of the 2014 tax year the Panania property remained the Applicant's principal place of residence. The Applicant submitted that the Applicant moved to a home at Arncliffe (Arncliffe) in mid-December 2013 and since then the Panania property has been used principally for storage, although the Applicant normally spends Wednesday nights there and has occasionally stayed there on other occasions. This does not make the Panania property the Applicant's principal place of residence nor does his other usage of the property. The Applicant submitted that as Arncliffe was at the taxing date for the 2014 tax year, namely 31 December 2013, the Applicant's residence, the Panania property cannot, objectively determined, be his principal place of residence for the 2014 tax year. Accordingly he is entitled to the benefit of the concession provided for in clause 6 of Schedule 1A.

The Respondent's case

1. The Respondent's case is summarised under the heading "Issues" at [8] to [11] in RS. The Respondent submitted that: 1. the principal issue is whether the actual use and occupation by the Applicant of the Panania property during the 2014 land tax year supports an entitlement to the exemption in clause 2 of Schedule 1A in the 2014 tax year, and as the Applicant is entitled to the clause 2 exemption for 2014, the exemption in clause 6 cannot apply in respect of the Randwick property in the same year. 2. the secondary issue is whether the Randwick property can be entitled to the exemption in clause 6 in the 2014 land tax year. The Respondent submitted that it cannot for two reasons; 1. either the four-year time limit in clause 6(3) is exceeded or the pre-requisites are not met; and 2. clause 6(7) is invoked such that it operates so as to bar the availability of the clause 6 exemption for the Randwick property in the 2014 year.

Consideration

1. Unless otherwise stated, all references in this decision to sections are to sections in the LTM Act, references to clauses are to clauses of Schedule 1A of the LTM Act, references to numbered paragraphs in respect of submissions by the Applicant are to paragraphs in AS and references to numbered paragraphs in respect of submissions by the Respondent are to paragraphs in RS.

Powers of Tribunal on review

1. Section 96 of the Taxation Administration Act 1996 (TA Act) provides that a taxpayer may apply to the Tribunal for an administrative review of a decision that has been the subject of an objection under certain circumstances, including if the taxpayer is dissatisfied with the Respondent's determination of the objection. It is common ground that the decision the subject of the objection is the Assessment rather than the disallowance of the objection. On a review the Tribunal may confirm, vary or reverse relevant decisions of the Chief Commissioner and make orders as to costs or otherwise as it thinks fit, s 101(1) of the TA Act.

Issues

1. The issue in these proceedings is whether the Assessment for the 2014 tax year should provide that the Randwick property is exempt from land tax for that tax year.

Onus of proof

1. The Applicant bears the onus of proving his case in a review by the Tribunal, s. 100 of the TA Act. The requisite standard of proof in such a review is the "balance of probabilities" Cornish Investments Pty Limited v Chief Commissioner of State Revenue (RD) [2013] NSWADTAP 25 at [31] and B & L Linings Pty Ltd v Chief Commissioner of State Revenue [2008] NSWCA 187, (2008) 74 NSWLR 481 at [104].

The law

1. Part 3 of the LTM Act provides that land tax is payable by the owner of all land in New South Wales other than land which is exempt from taxation under that Act. The tax year is each period of 12 months commencing on the first day of January and land tax is charged on land owned as at midnight on 31 December immediately preceding the tax year (sections 7-9).
2. Section 10(1)(r) provides that (except where otherwise expressly provided in the LTM Act) land that is exempt from taxation under the principal place of residence exemption in Schedule 1A shall be exempted from taxation under the LTM Act.
3. The general principal place of residence exemption is found in clause 2(1) which, subject to clause 2(2) and the restrictions set out in Part 4 of the Schedule, provides that land used and occupied by the owner as his or her principal place of residence and for no other purpose is exempt from taxation. Part 3 of the Schedule provides some concessions including the concession in clause 6 that an owner of unoccupied land is entitled to claim the land as his or her principal place of residence under certain conditions.
4. Set out below are excerpts from Schedule 1A: Schedule 1A Principal place of residence exemption Part 1 - Preliminary 1 Definitions (1) In this Schedule: "principal place of residence exemption" --see clause 2. "residential land" --see clause 3… "taxing date" --means midnight on the thirty-first day of December. Part 2 - Principal place of residence exemption 2 Principal place of residence exemption (1) Land used and occupied by the owner as the principal place of residence of the owner of the land, and for no other purpose, is exempt from taxation under this Act, in respect of the year commencing 1 January 2005 or any succeeding year, if the land is: (a) a parcel of residential land, or … (2) Land is not used and occupied as the principal place of residence of a person 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 land tax is levied, or (b) in any other case, the Chief Commissioner is satisfied that the land is used and occupied by the person as the person's principal place of residence. (3)… (4) The exemption conferred by this clause is referred to as the "principal place of residence exemption". (5) The principal place of residence exemption is subject to the restrictions set out in Part 4. 3 Residential land--meaning (1) In this Schedule, "residential land" means land that is used and occupied for residential purposes and for no other purpose, that use and occupation being use and occupation of a building or buildings designed, constructed or adapted for residential purposes… Part 3 - Concessions in application of principal place of residence exemption 4.… 5.… 6 Concession for unoccupied land intended to be owner's principal place of residence (1) An owner of unoccupied land is entitled to claim the land as his or her principal place of residence, if the owner intends to use and occupy the land solely as his or her principal place of residence. In such a case, the owner is taken, for the purpose of the principal place of residence exemption, to use and occupy the unoccupied land as his or her principal place of residence. It is an offence under section 55 of the Taxation Administration Act 1996 to make a statement to a tax officer, or give information to a tax officer, orally or in writing, knowing that it is false or misleading in a material particular. (2) This clause does not apply unless: (a) the land is unoccupied because the owner intends to carry out, or is carrying out, building or other works necessary to facilitate his or her intended use and occupation of the land as a principal place of residence, and (b) if those building or other works have physically commenced on the land, no income has been derived from the use and occupation of the land since that commencement, and (c) the intended use and occupation of the land is not unlawful. (3) This clause applies in respect of the assessment of a person's ownership of land only in the period of: (a) 4 tax years immediately following the year in which the person became owner of the land, or (b) if the land is used and occupied for residential purposes by a person other than the owner at any time after the person became owner, 4 tax years immediately following the tax year in which the building or other works necessary to facilitate the owner's intended use and occupation of the land are physically commenced on the land. (4) (Repealed) (5) If the principal place of residence exemption applies by operation of this clause to land not actually used and occupied by a person as his or her principal place of residence on a taxing date, that exemption is revoked if the person fails to actually use and occupy the land as his or her principal place of residence by the end of the period in which this clause applies in respect of the assessment of the person's ownership of the land and to continue to so use and occupy the land for at least 6 months. (6) The effect of the revocation is that the principal place of residence exemption is taken not to have applied to the land in respect of any tax year to which, but for the revocation, it would have applied. Land tax liability is to be assessed or reassessed accordingly. (7) This clause does not apply in respect of land owned by a person if: (a) the person or any member of the person's family (within the meaning of clause 12) is entitled to have his or her actual use and occupation of other land taken into account under section 9C or 9D or under this Schedule, or (b) the person owns land outside New South Wales that is the principal place of residence of the person or a member of the person's family (within the meaning of clause 12), or (c) the land, or the land if combined with any adjoining land of which the person is an owner, is capable of having more than 2 residences or residential units lawfully built on it. (8) For the purposes of this clause: "unoccupied land" means land that is not being used or occupied for any purpose. 7… 8 Concession for absences from former residence (1) If the Chief Commissioner is satisfied that: (a) a person is the owner of land ("the former residence") that has been used and occupied by the person as his or her principal place of residence for a continuous period of at least 6 months, and (b) the person uses and occupies other land (whether or not in New South Wales), that is not owned by the person, as his or her principal place of residence, the person is taken, for the purpose of the principal place of residence exemption, to continue to use and occupy the former residence as his or her principal place of residence. (2) The maximum period for which a person may be taken, under this clause, to continue to use and occupy a former residence as a principal place of residence is 6 years starting at the end of the last period (of at least 6 months) during which the former residence was used and occupied by the person as a principal place of residence (not including any period for which the person may be taken, under clause 7 or this clause, to have used and occupied the former residence as a principal place of residence). (3) If the principal place of residence exemption applies to the former residence of a person by operation of this clause, the exemption ceases to have effect if the person is the owner of the former residence at the end of the 6-year period referred to in subclause (2) and fails: (a) to resume actual use and occupation of the residence as a principal place of residence by the end of that period, and (b) to continue that use and occupation for at least 6 months. (3A) The principal place of residence exemption also ceases to have effect if the land ceases to be capable of being used and occupied as a residence and remains incapable of being so used and occupied for a period exceeding 4 years. (4)… (5)… (6) This clause applies in respect of the assessment of a person's ownership of land in a tax year only if the Chief Commissioner is satisfied that no income has been derived from the use or occupation of the former residence in the preceding tax year, except as permitted by subclause (7). (7)… (7A)… (8) This clause is subject to clause 12 (which limits members of a family to one principal place of residence exemption). (9)… 9… Part 4 - Restrictions 11… 12 Only one principal place of residence for all members of same family (1) For the purposes of the principal place of residence exemption, only one place of residence may be treated as the principal place of residence of all members of the same family. (2) If members of a family own (whether jointly or separately) more than one residence used and occupied by any of them as a principal place of residence, the Chief Commissioner is to treat the one place of residence elected as the principal place of residence of the family as the principal place of residence of all members of the family in respect of a tax year. (3) Such an election is to be made, by or on behalf of the members of the family, in writing and must be lodged with the Chief Commissioner within the period for the lodging of objections under section 89 of the Taxation Administration Act 1996. (4) An election may be made, in respect of a tax year, by the end of the period allowed for the lodging of an objection to a notice of assessment of land tax liability (being an initial assessment of land tax liability) for that tax year. (5) If an election is not made, the Chief Commissioner is to treat the residence that has the highest land value for land tax purposes as the principal place of residence of all members of the family. (6) For the purposes of this clause, a "family" consists of the following: (a) a person and his or her spouse (if any), (b) any dependent child or dependent step-child of the person and his or her spouse (or of either of them) who ordinarily resides with the person or his or her spouse. (10) Nothing in this clause prevents more than one residence from being treated as the principal place of residence of members of a family under clause 7 (Concession for sale of former principal place of residence).

Change of residence from Panania to Arncliffe

1. The Respondent submitted that the Panania property, the Applicant's principal place of residence for 2013, remained his principal place of residence for 2014. The Applicant submitted that on the weekend of 14-15 December 2013 he moved from the Panania property to Arncliffe, which is not owned by him, and since that move the Panania property has been used principally for storage. The Applicant submitted that the position which applied at the taxing date in 2013, 31 December 2012, did not apply on 31 December 2013 and accordingly the Panania property was not the Applicant's principal place of residence for the 2014 year. The Applicant submitted that he intends to resume residence at the Randwick property as soon as rebuilding is complete and accordingly is entitled to the benefit of the concession provided for in clause 6.
2. Matters which are integral to the Tribunal's consideration of the issues in this matter concern the details of the change of residence on the weekend of 14-15 December 2013 and following and the use to which the Panania property was put after that weekend both until 31 December 2013 and thereafter for a reasonable period following the taxing date.

Care by the Applicant of a relative

1. References are made from time to time in this decision to "Mr CD". Unchallenged evidence before the Tribunal was to the effect that Mr CD is an adult relative of the Applicant who has been cared for by the Applicant since 2012. The Applicant's involvement in that ongoing care is increasing.
2. No evidence was called from Mr CD. The Respondent submitted at [133] that the Tribunal should conclude that Mr CD was properly to be called by the Applicant and the only inference to draw from the Applicant's failure to call Mr CD was that his evidence would not have assisted Applicant's case. The Respondent relied on Jones v Dunkel (1959) 101 CLR 298. The Applicant submitted at [14] in ASR, and Mr McMillan made oral submissions to the effect, that Jones v Dunkel did not apply.
3. I observe that the evidence concerning the Applicant's care of Mr CD was filed with the Tribunal after RS was filed and no oral submissions were made on behalf of the Respondent to the effect of the [133] submissions. In the circumstances I find that it would not have been appropriate for the Applicant to call evidence from Mr CD in these proceedings and Jones v Dunkel does not relevantly apply.

The Arncliffe property

1. The Applicant's evidence as to the change of address to Arncliffe is found at [9] in his first affidavit, at [3] in his second affidavit and in the Applicant's oral evidence. Set out below are paragraphs [9] and [3]: [9] In mid-December 2013 I moved from (Panania) to (Arncliffe). This property is not owned by me… [3] As stated in paragraph 9 of my affidavit… In mid December 2013 (on the weekend of 14-15 December) I moved from Panania to reside at… (Arncliffe). Arncliffe is not owned by me. It is owned by (Mr AB).
2. The Applicant's oral evidence was that that apart from sleeping at the Panania property on limited occasions from mid-December 2013 he slept and ate at Arncliffe. He said: 1. there was a clothes washing facility at Arncliffe, however he did not use it. He tried to gather his laundry weekly but sometimes he missed something or the family who lived at Arncliffe offered to do it. He did not wish to intrude; 2. Arncliffe was not a rental property it was owned by his friend Mr AB; he took Mr AB and his daughter to dinner once a week; 3. he slept in a bedroom at Arncliffe which he shared with his girlfriend; he used about 30% of the storage space in the bedroom for his clothes; 4. he used the kitchen and a TV room at Arncliffe; and 5. there was a formal dining room at Arncliffe which was used for family occasions by Mr AB's family.
3. The s 58 documents show at pages 70-71 an IKEA receipt for a bed frame with an e-mail from the Applicant to the OSR to the effect that a bed frame, base, support and mattress was purchased for use at Arncliffe.

The Panania property

1. The Applicant's written evidence in relation to his use of the Panania property after his move to Arncliffe is found at [9] in the first affidavit and at [4] in the second affidavit. This evidence is: [9] …(Panania) has, since December 2013, been unoccupied and is used for storage. [4] Since moving from Panania it has been used principally for storage, though I normally spend Wednesday night there and have occasionally stayed there on other occasions. I was there between 24 May and 15 June 2014. I am concerned that Panania appear lived in. I also do some maintenance on Panania, use the washing machine to launder my clothes and the clothes of (Mr CD) … When there I also use a computer and use exercise equipment.
2. The Applicant's oral evidence was that that after mid-December 2013: 1. he kept a bed at the Panania property in which he could sleep; he kept exercise equipment at the Panania property; his washing machine and dryer were at the Panania property; his telephone landline at the Panania property was disconnected in late 2014 or early 2015; his television set was at the Panania property; he kept some clothes at the Panania property; the Panania property was fully furnished and the furnishings included his dining table; he stayed at the Panania property on Wednesdays; he did not move his furniture out of the Panania property; 2. all of his necessary assets were kept at the Panania property; 3. he laundered his and Mr CD's clothes at the Panania property; and 4. his computer was at the Panania property for his personal use; he maintained an Internet connection at the Panania property; he needed to deal with a dispute in which he was involved and he did not want to take his papers to someone else's house so he did his work in relation to the dispute at the Panania property.
3. The Respondent submitted at [82] to [97] that certain s 58 documents support the view that the Applicant continued to use and occupy the Panania property past mid-December 2013 and well into the 2014 land tax year to the same extent that he did in the 2013 land tax year. Those documents relate to water, electricity and landline usage and an internet connection.

Water usage

1. Average daily water usage at the Panania property is shown by Sydney Water bills in the s 58 documents at pages 199 and 197 to have been as follows: 1. 2 August 2011 to 3 November 2011 - 247 litres, for the immediately preceding period 23 litres and for the August - November 2010 period 10 litres; 2. 31 October 2013 to 31 January 2014 - 641 litres, for the same period in the previous year, 504 litres; 3. 31 January to 12 May 2014 - 594 litres, for the same period in the previous year, 609 litres;

Electricity usage

1. Electricity usage at the Panania property is shown in Energy Australia bills in the s 58 documents at pages 212 - 213. The information includes the following average daily usage:
2. September 2010 to December 2010 - 2kWh.
3. For the three months to 21 September 2011 (most of which occurred immediately prior to the Applicant moving to the Panania property) - 5kWh.
4. September to December 2011 - 21kWh.
5. 21 December 2012 to 22 March 2013 - 15 kWh; and
6. 21 December 2013 to 22 March 2014 - 16 kWh.

Landline telephone

1. Average monthly usage charges recording the number of outgoing calls made from the Panania property (where details were provided) and the cost of those calls are shown by Telstra bills in the s 58 documents at pages 155 to 171 as follows: Period Number Of Outgoing Calls Cost Of Outgoing Calls 4 Mar 14 to 3 Jun 14 104 $43.63 4 Dec 13 to 3 Mar 14 79 $92.80 4 Sep 13 to 3 Dec 14 Not recorded $63.97 4 Jun 13 to 3 Sep 13 Not recorded $64.87 4 Mar 13 to 3 Jun 13 Not recorded $55.82 4 Dec 12 to 3 Mar 13 Not recorded $53.82

The Applicant's oral evidence was that the landline at the Panania property was disconnected in late 2014 or early 2015.

Internet cable connection

1. Section 58 documents at pages 87 to 192 are copies of tax invoices from Optus for broadband internet connection at the Panania property from January 2013 to February 2014.
2. Mr McMillan requested that the Applicant, who had already completed his evidence, be recalled in order to provide an explanation in respect of the telephone and electricity usage at the Panania property after mid December 2013. There being no objection from the Respondent, the Applicant was recalled.
3. When asked why the electricity usage figures appeared high after mid December 2013 the Applicant said that he left the Randwick property without a fridge as there was one at the Panania property. It was an old fridge and there were some electrical problems. An electrician was called who said that that the fridge was using the majority of power at the Panania property.
4. The Applicant was asked what proportion of electricity at the Panania property was used by the refrigerator in respect of each quarter. He said that he did not know but it was the majority of electricity used at the property.
5. In relation to the bills for outgoing calls on the telephone landline at the Panania property, the Applicant said that the house was previously owned by Mr CD's late brother. It was easier for Mr CD to contact the Applicant on the landline number rather than to call the Applicant's mobile number. The Applicant said that when he was at the Panania property he used the landline to make outgoing calls.

The Applicant's evidence

1. The Applicant's written evidence concerning the Randwick property included: 1. he had not obtained any income from the property - first affidavit at [2]; 2. he never intended that his move to the Panania property would be other than temporary. His intention at all relevant times was to resume living at the Randwick property when the construction was completed. He only moved to the Panania property because of the building work at the Randwick property- first affidavit at [8]; 3. he intends to resume residence at the Randwick property as soon as rebuilding is complete - second affidavit at [5]; 4. construction pursuant to the contract with Prohora Building Pty Ltd was delayed for several reasons including the extreme ill-health of both his parents, the necessity for the builder to finish the work and for a construction certificate to be obtained. More recently after the builder was ready to start work at the Randwick property a neighbour of the Applicant constructed, without prior notification to the Applicant, a double brick fence. The fence and its footings materially encroached onto the Randwick property and extended to where the Applicant had approval to construct his residence - third affidavit at [2]; 5. discussions with the neighbour resulted in agreement that the fence would be demolished as it was unclear how the footings would impact on the structural integrity of the Applicant's proposed residence. As at 9 July 2015 preliminary excavations had been completed and work was proceeding. A photograph of the Randwick property taken by the Applicant on 6 July 2015 was attached to the affidavit - third affidavit at [3].
2. The Applicant's oral evidence in respect of the Randwick property included: 1. he last attended the Randwick property one week before the hearing, the builder and structural engineer were both present. Certain footings of a structure were exposed; 2. the footings for his new residence had not yet been completed; 3. when asked when the construction was likely to be completed he said that the builder had said it would be completed before the end of the year (2015). On completion he would move in as soon as possible.

Section 58 documents concerning the Randwick property

1. In response to a request from the Office of State Revenue (OSR) for copies of development applications submitted to council for the Randwick property , the Applicant forwarded to the OSR by e-mail on 24 July 2014 scans of the development application and section 96 applications/approvals said to be taken from Randwick City Council web pages. Pages 33-37 of the s 58 documents provide details of development applications submitted in February 2010, January 2011 and February 2013 in respect of the Randwick property. Those development applications refer in 2010 to demolition of existing dwelling and pool and construction of a new two-storey dwelling with attached double garage; in 2011 to the modification of the previously approved development by repositioning the southern wall of the storage area behind the garage, and in 2013 to a modification of the approved development by relocation of garage to a side boundary, addition of roof to first-floor terrace on northern side, and other changes to the proposed building.

Postal addresses

1. Section 58 documents at Tab 7 include the following information: 1. the Applicant's electoral roll commission address from 10 December 1998 to 20 January 2012 was the Randwick property. The address from 23 July 2012 until 18 January 2013 and from 24 July 2013 to 30 January 2014 was the Panania property. 2. The Sydney Water Corporation postal address for the Randwick property on 5 March 2014 was the Panania property. 3. The Sydney Water Corporation postal address for the Panania property on 30 January 2012 was the Randwick property.

The Applicant's submissions

1. Mr McMillan submitted at [4] that having regard to the appeal decision, the Applicant was entitled to the benefit of the clause 6 concession in respect of the Randwick property, unless the Panania property was the Applicant's principal place of residence in respect of the 2014 tax year. Accordingly, the issue for the Tribunal is whether the Panania property remained the Applicant's principal place of residence in respect of the 2014 year.
2. The evidence disclosed that on the weekend of 14-15 December 2013 the Applicant changed his residence from the Panania property to Arncliffe, a property which he did not own, and since that time the Panania property has been used principally for storage.
3. The fact that the Applicant normally spent Wednesday nights at the Panania property, had occasionally stayed there on other occasions and used a washing machine and exercise equipment and a computer at the Panania property did not make the Panania property his principal place of residence. Mr McMillan also submitted at [2] in ASR: "The water usage and electricity usage relied on by the respondent did not mean, as is asserted by the respondent "the Applicant continued to use and occupy the Panania property past mid-December 2013 and well into the 2014 land tax year to the same extent as (his principal place of residence) he did in the 2013 land tax year". Nor does the "Landline usage" on which the respondent also relies lead to a different result."
4. In addition to the submissions referred to immediately above I have considered the remainder of Mr McMillan's written submissions in AS and ASR, his oral submissions at the hearing and the letter he sent to the Tribunal after the hearing concluded.
5. The general principal place of residence exemption and certain concessions together with excerpts from the Schedule are set out at [16] to [18] above. The clause 2 exemption is subject to the restrictions set out in Part 4 of the Schedule. Clause 12(1), which is in Part 4, relevantly provides that only one place of residence may be treated as the principal place of residence of all members of the same family.
6. Part 3 of the Schedule provides certain concessions to taxpayers in respect of the principal place of residence exemption. The Applicant relies on the concession in clause 6 which is within Part 3. The Respondent submitted both that the conditions in clause 6 have not been satisfied and that, pursuant to clause 2, the Panania property remained the principal place of residence of the Applicant for 2014.

Consideration of clause 6

1. Clause 6(1) conditionally provides that an owner of unoccupied land is entitled to claim the land as his or her principal place of residence. Clauses 6(2), (3), (5) and (7) set out various conditions each of which must be satisfied in order for the conditional concession to apply.
2. Clause 6(1) requires that "the owner intends to use and occupy the land solely as his or her principal place of residence". The appeal panel observed at [62] that in respect of the 2013 tax year it was "not disputed that the appellant (in this matter the Applicant) intended to reside again at Randwick".
3. Clause 6(2) provides: (2) This clause does not apply unless: (a) the land is unoccupied because the owner intends to carry out, or is carrying out, building or other works necessary to facilitate his or her intended use and occupation of the land as a principal place of residence, and (b) if those building or other works have physically commenced on the land, no income has been derived from the use and occupation of the land since that commencement, and (c) the intended use and occupation of the land is not unlawful.
4. In respect of clause 6(2)(a) regarding the 2014 tax year the Respondent submitted at [98] and [99]: ...no evidence is available which shows an actual resumption of construction work on Randwick and the alleged original intention has not come to fruition some 3.5 years after the evidence shows the Applicant moved out of Randwick for the purpose of allowing it to be knocked down and rebuilt; and over 2 years after receiving the required funds from the insurer to allow him to resume construction work on Randwick. This suggests a pattern of action inconsistent with the alleged intention.
5. The Applicant's response at [4] in ASR is "the delay in construction is explained. The Applicant intends to resume residing Randwick (sic) when construction is complete. The suggestion to the contrary is unfounded. It is also contrary to" the 2013 decision.
6. Mr McMillan submitted that the finding at [47] in the 2013 decision, namely that the Applicant had discharged the burden of proving the intention required by clause 6(1), constituted an issue estoppel in respect of the 2014 tax year. I find that an intention of the Applicant at a relevant date in respect of the 2013 tax year does not necessarily mean that the Applicant held the same intention at a relevant date in respect of the 2014 tax year. Accordingly I find that there is no relevant issue estoppel in respect of the Applicant's intentions.
7. The Applicant's evidence is that at all relevant times it has been and continues to be his intention to resume residence at the Randwick property as soon as rebuilding is complete. Some evidence has been provided as to reasons for the lengthy delay in construction work. That evidence mainly consists of statements by the Applicant. There is minimal documentary or other objective evidence before the Tribunal to support the Applicant's statements and no reason has been provided as to why more substantial documentary evidence was not put forward. However the Respondent has not provided any evidence to the effect that the Applicant was not carrying out relevant building or other works at the Randwick property. I find on the balance of probability that the Applicant has the relevant intent required for the purpose of clause 6(1) and that some relevant building or other works were being carried out at the Randwick property by the Applicant.
8. In respect of clause 6(2)(b) the Applicant gave unchallenged evidence in his first affidavit that he had not obtained any income from the Randwick property. There is no evidence nor any submission to the contrary and I find that the conditions in this clause have been satisfied.
9. In respect of clause 6(2)(c) there is evidence from the Applicant that he resided at the Randwick property from early 1993 until September 2011 and at pages 33-36 of the s 58 documents that the local council had granted development applications for the construction of a two story dwelling at the property. There is no evidence or submissions that the intended use and occupation of the property is unlawful. Accordingly I find that the conditions required by clause 6(2)(c) have been satisfied.
10. Clause 6(3) relevantly provides that the clause 6 concession will only apply in the period of: (a) 4 tax years immediately following the year in which the person became owner of the land, or (b) if the land is used and occupied for residential purposes by a person other than the owner at any time after the person became owner, 4 tax years immediately following the tax year in which the building or other works necessary to facilitate the owner's intended use and occupation of the land are physically commenced on the land.
11. Subclauses (a) and (b) are in the alternative and the Applicant relies on subclause 6(3)(b). The relevant undisputed facts were that the Applicant's niece lived with him at the Randwick property from 1986 to 1999 and relevant demolition work at the Randwick property commenced in about September 2011. As at both the taxing date and the date of the hearing the relevant 4 year period had not expired.
12. The Respondent made submissions in relation to clause 6(3)(b) from [57] to [63]. In particular the Respondent submitted at [61] and [63]: 61. On the proper construction, the words "other than the owner" in clause 6(3)(b) mean "to the exclusion of the owner". In other words, for clause 6(3)(b) to be satisfied a person other than the owner must use and occupy the property for residential purposes. 63. The purpose of the provision is to maintain the availability of the exemption in clause 6(1) where a person purchases a property which is occupied and used by another person but which the new owner intends to use and occupy as their PPR following building work
13. The Respondent submitted that, although the Applicant's niece lived for a period at the Randwick property, clause 6(3)(b) did not apply as the Applicant resided at the Randwick property at the same time as his niece. Accordingly the niece's occupation was not occupation of the property "to the exclusion of the owner". I observe that the Respondent provided no authority in support of the submissions in either paragraph [61] or [63].
14. The Applicant's written submissions are at [10] and [11] in ASR. The Applicant relied on the 2013 decision at [51] in which the Tribunal held that the requirements of clause 6(3)(b) were met as it was not disputed that the Applicant's niece had occupied the land for residential purposes for several years after the Applicant became its owner and the relevant taxing date was less than four years after work commenced. The Applicant also submitted that the Tribunal's conclusion on subclause 6(3)(b) was challenged before the appeal panel and not said to be wrong. Accordingly the Tribunal is bound by the 2013 decisions.
15. There is no evidence before me that the Respondent's current submission as to an implied requirement for exclusive occupation by a person other than the owner was raised before the 2013 Tribunal. The appeal panel referred to subclause 6(3)(b) at [24], [39] and [91]. The panel observed that the subclause was the subject of a notice of contention which concerned the time limits within which the exemption applied and held that as clause 6(7) had been activated the Randwick property was disentitled from the principal place of residence exemption and hence there was no need to consider the notice of contention.
16. Mr McMillan is correct in asserting that the conclusion of the 2013 proceedings on subclause 6(3)(b) was challenged before the appeal panel and not said to be wrong. However the appeal panel did not say that the conclusion was correct, rather it said that there was no need to consider the issue. The onus of proving each of his contentions remains on the Applicant.
17. The Applicant submitted that the wording of the Explanatory Memorandum of the Bill which introduced the schedule into the LTM Act does not assist in the interpretation of clause 6. I agree with that submission. The Applicant further submitted that regardless of what the legislature may have intended it is the words of the legislation which are to be construed and relied on. The Applicant's submission relied on In Re Bolton ex parte Beane (1987) 162 CLR 514 at 518 and Nominal Defendant v GLG Australia Pty Ltd (2006) 228 CLR 529 at 555 [82] (Kirby J).
18. Having regard to the evidence before me I am not satisfied that the Tribunal is bound by the 2013 decision in respect of the application of paragraph 6(3)(b). I accept the Applicant's argument that it is the words of the legislation which are to be construed and relied on. I also accept the Respondent's submission to the extent that it is arguable that the wording "other than the owner" could be interpreted as "to the exclusion of the owner". However in the circumstances and having regard to my findings below in respect of the application of clause 6(7) there is no need for me to make a finding as to whether or not the Applicant has satisfied the conditions of clause 6(3).
19. Clauses 6(5) and (6) provide that the principal place of residence exemption which might otherwise apply is revoked: if the person fails to actually use and occupy the land as his or her principal place of residence by the end of the period in which this clause applies in respect of the assessment of the person's ownership of the land and to continue to so use and occupy the land for at least 6 months. The effect of such a revocation is that the exemption is taken not to have applied to the land in respect of any tax year to which, but for revocation, it would have applied and land tax liability is to be assessed or reassessed accordingly.
20. I observe that the Respondent made no submission that clauses 6(5) and (6) were relevant. I find that in respect of the 2014 tax year no relevant time period has expired revoking the clause 6 exemption.
21. Clause 6(7) relevantly provides that the clause 6 exemption does not apply "in respect of land owned by a person if… the person…is entitled to have his or her actual use and occupation of other land taken into account under…this Schedule".
22. The Applicant accepted at [7] in ASR that he did not as a matter of fact actually use or occupy the Randwick property in the 2014 year and that the Panania property was determined to be his principal place of residence in respect of the 2013 land tax year. The parties agree that the issue for determination by the Tribunal is whether in respect of the 2014 year the Panania property was still the Applicant's principal place of residence.
23. The Applicant's submission is that as at the taxing date, 31 December 2013, his residence had changed from the Panania property to Arncliffe. The Respondent submitted that the evidence was not indicative of a vacation of the Panania property sufficient to demonstrate that it ceased to be the Applicant's principal place of residence during the 2014 tax year. The Respondent further submitted that the Applicant not only used and occupied the Panania property as his principal place of residence at the taxing date but also that that use and occupation continued continuously until at least 24 May 2014.
24. There is no dispute that in order for the Panania property to be the Applicant's principal place of residence in respect of the 2014 tax year it is necessary, in accordance with clause 2(2), that: (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 land tax is levied, or (b) in any other case, the Chief Commissioner is satisfied that the land is used and occupied by the person as the person's principal place of residence.
25. It is also undisputed that the onus lies on the Applicant to prove on the balance of probability that the Panania property, which was held to be his principal place of residence in respect of 2013 was no longer his principal place of residence in respect of 2014.
26. In Flaracos v Chief Commissioner of State Revenue [2003] NSWSC 68 Gzell J dealt with the land tax exemption for use and occupation of a property as a principal place of residence pursuant to the provisions of the LTM Act during the period 1 January 1997 to 31 December 2000. During that period the relevant exemption conditions were found in the then section 3(3) of the LTM Act. That section contained a definition of use or occupation as a principal place of residence which is substantially identical to the provisions in clause 2(2) of the Schedule in respect of the 2014 land tax year. At [4] His Honour set out the provisions of section 3(3) as follows: "For the purposes of this Act, in respect of any year in respect of which taxation is leviable or payable, land or a flat is not used or occupied as a principal place of residence of a person unless: (a) that land or flat and no other land or flat has, since before the first day of July that last preceded the commencement of that year, been continuously used and occupied by that person for residential purposes and for no other purpose; or (b) in any other case, the Chief Commissioner is satisfied that the land or flat is used and occupied by that person as the person's principal place of residence."
27. His Honour found at [21]: he (Mr Flaracos) established that until about August 1998 he had tenants in his home to whom he did not convey exclusive possession. He remained in his home with them except on occasions when he took holidays and made extended trips to Queensland, Victoria, South Australia and Western Australia. On each occasion the plaintiff intended to, and did, return to the premises to resume a physical presence. From about August 1998 onwards there were no tenants and he remained in exclusive possession of the premises.
28. Mr Flaracos' evidence included that during the assessment period he lived in cheap shared accommodation elsewhere for about 2-3 months at a time; he also lived in his home and rented it to someone; his home had been vacant for long periods because he hated putting in tenants; he still slept at his home at nights for security; he had gone on holidays and rented his home; any renting of his house was always temporary; for part of the assessment period his driver's licence bore the address of his mother; he registered a motor vehicle at his mother's address because he was travelling several days a week; and he used his mother's address for some correspondence.
29. His Honour referred to the decision of Bowen JA (with whom Jacobs P agreed) in Commissioner of Land Tax v Christie [1973] 2 NSWLR 526 in respect of the concepts of "use" and "occupation."
30. In respect of "use" His Honour held at [23]: On the evidence before me the plaintiff's home at Peakhurst was used as a place of residence. There was a dwelling on the land used for this purpose and no other. On the findings I have made, it was used as his sole and, therefore, his principal place of residence.
31. In respect of the requirement of "occupation" His Honour referred at [24] to Bowen JA who said at 533-534: ""Occupation" is not synonymous with legal possession. It includes possession, but it also includes something more: see Newcastle City Council v Royal Newcastle Hospital. It involves an element of control, of preventing or being in a position to prevent the intrusion of strangers (Newcastle City Council v Royal Newcastle Hospital). It is for this reason that physical presence on the land and fencing are evidence of occupation. But continuous physical presence or physical presence on every part of the land does not have to be shown in order to establish occupation. If it were necessary to prove physical presence on every part of a residential block to secure the deduction a substantial proportion of residential blocks could well be denied it.
32. Gzell J held at [27] that the "plaintiff was in occupation of the Peakhurst premises. Notwithstanding the contemporaneous presence of a tenant, it was the plaintiff who maintained control over the premises".
33. His Honour further held: 28 The continuous use and occupation required by s 3(3)(a) of the Act means that the use of the land for residential purposes must remain constant throughout each relevant eighteen month period. If portion of a residence is converted into a shop, the land no longer answers the description of continuous use for residential and no other purpose. The plaintiff's land having at all times been used as a dwelling, it satisfied this requirement. 29 In my opinion continuous physical presence on the land is not required to constitute continuous occupation. If a person leaves his or her premises for a holiday, it would defeat the purpose of the Act to conclude that occupation had ceased to be continuous. So long as the person retains the right to possession and controls possession, that person remains in occupation, in my view. The observation of Sir Nigel Bowen in Christie that physical presence over all the land is not necessary to establish occupation is equally apposite when there is some hiatus in physical presence over time. 30… When he left on his extended trips he intended to and did return to live in the premises. During his physical absence he retained the right to possession and he maintained his rights of control over the land. 31 I find that in each period commencing on I July of the year preceding each year of assessment and ending on the last day of the year of assessment, the plaintiff continuously used and occupied his land at 146 Lorraine Street, Peakhurst for residential purposes and for no other purposes and the land satisfied the requirements in s 3(3)(a) of the Act.
34. The Applicant did not dispute that his use and occupation of the Panania property as his principal place of residence continued up to mid December 2013. The evidence in relation to the extent of his use and occupation of the Arncliffe property from the weekend of 14-15 December 2013 is summarised at [23] - [24] above together with evidence that he purchased a bed for his use at that property.
35. There is no dispute that the Applicant retained ownership and control of the Panania property on and after the taxing date. His use of that property after he moved to Arncliffe included storage of all of his assets other than some clothing. The house was fully furnished. The Applicant slept at the property every Wednesday evening and for a period of some three weeks in May-June 2014. He carried out some maintenance at the property, used a computer, exercise equipment, telephone landline, washing machine and dryer so as to wash his own clothes and those of Mr CD and used a refrigerator and internet connection. The Applicant's evidence at [4] in his second affidavit was that he was "concerned that Panania appear lived in".
36. The documentary evidence in relation to the Panania property in the s 58 documents outlined at [29] to [37] above indicates that: 1. there was no appreciable reduction in water usage between 14 December 2013 and 12 May 2014 in comparison to the period prior to 14 December 2013. 2. There was a slight increase in average daily electricity usage for the three months after 14-15 December 2013 in comparison to the comparable period in previous year. The average electricity usage for the three months to 21 September 2011 was substantially less than in the period after September 2011. This is despite the Applicant's evidence that an electrician informed him, while he was residing at the Panania property that the majority of electricity usage related to an old refrigerator which was already at the Panania property when the Applicant moved there in September 2011. The average daily electricity usage in evidence for the period from September 2011 until 22 March 2014 varies from 15 kWh to 21 kWh. If a majority of that usage was attributed to the old refrigerator it would be reasonable to expect that, if the refrigerator was operating prior to September 2011, the refrigerator was using not less than 7 kWh per day. However the evidence shows that the average daily usage for the whole property for the three months prior to the Applicant moving in was 5 kWh. No evidence was led as to whether or not the refrigerator was in use prior to September 2011 nor when the apparent excessive usage of electricity commenced. This lack of evidence does not assist the Applicant satisfy his onus. 3. The average monthly usage charges in respect of outgoing calls on the telephone landline at the property declined somewhat after 4 March 2014 although it substantially increased in the period 4 December 2013 to 3 March 2014. The evidence is that the number of outgoing calls materially increased from the quarter commencing 4 December 2013 to the quarter commencing 4 March 2014. The Applicant's evidence that he maintained the landline at the Panania property so that Mr CD could call him there rather than call him on his mobile telephone does not explain the substantial number of outgoing phone calls made from the Panania property on the landline after the Applicant's move to Arncliffe. Accordingly the evidence as to outgoing phone calls from the Panania property after mid-December 2013 does not assist the Applicant in satisfying his onus.
37. Having regard to the evidence before me as to the extent of the use and occupation of the Panania property by the Applicant which continued after the date on which the Applicant said he moved to Arncliffe I am not satisfied on the balance of probability that the Panania property ceased to be the principal place of residence of the Applicant as at 31 December 2013. Accordingly I am not satisfied that the Applicant is not entitled to have his actual use and occupation of the Panania property taken into account under the schedule.
38. Clause 8 provides a conditional concession for absence from a former principal place of residence. The Applicant's objection expressly referred to the exemption provided by clause 8. However Mr McMillan informed the Tribunal that the Applicant would not be relying on the clause 8 concession. Accordingly I have not dealt with the application of that clause to the facts in evidence.
39. Clause 12 provides that only one place of residence may be treated as the principal place of residence of all members of the same family. Should members of the family own use and occupy more than one residence as a principal place of residence then the owner may elect which of those places will be the principal place of residence of all members of the family in respect of a tax year. If the Applicant used and occupied as his principal place of residence in respect of the 2014 year both the Panania property and the Randwick property then the election referred to in clause 12 may have been relevant. However the option of having that election does not arise as the evidence is, as has been acknowledged by the Applicant, that the Applicant did not as a matter of fact actually use or occupy the Randwick property in the 2014 year.

Decision

1. Having regard to the above findings on the material before me, the Applicant has not satisfied me on the balance of probability that the Panania property was not his principal place of residence in respect of the 2014 land tax year. Accordingly the concession for unoccupied land intended to be the Applicant's principal place of residence in clause 6 does not apply and the Randwick property is not exempt from land tax for the 2014 year.
2. The correct and preferable decision of this Tribunal is that the decision of the Chief Commissioner under review is affirmed. 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: 19 November 2015