Haitao Peng v Chief Commissioner of State Revenue [2022] NSWCATAD 212

Background

On 1 September 2016, the Grant was paid to the Applicant in respect of a unit in Hornsby (“Grant Property”), but the decision to pay the Grant was reversed as the result of a review undertaken by the Chief Commissioner on 18 June 2021. By decisions of that date, the Chief Commissioner decided that:

1. the Applicant did not satisfy the “residence requirement” under s. 12 of the First Home Owner (New Homes) Act 2000 (FHOG Act);
2. the initial determination of 1 September 2016 to pay the Grant should be reversed;
3. the Applicant should be required to repay the grant; and
4. a penalty of $4,500 should be imposed under s. 45 of the FHOG Act.

The Statutory Framework

An applicant is eligible for the payment of the Grant if he or she complies with the eligibility criteria contained in the FHOG Act, including the “residence requirement." Section 12 of the FHOG Act provides, relevantly:

“12 Criterion 5- Residence requirement

1. An applicant for a first home owner grant must:
   1. commence occupation of the home to which the application relates as the applicant’s principal place of residence within 12 months after completion of the eligible transaction or the period approved by the Chief Commissioner under this section, and
   2. occupy the home as a principal place of residence for a continuous period of at least 6 months or the period approved by the Chief Commissioner under this section …”

Section 45 of the FHOG Act allows the Chief Commissioner to require an applicant to repay a Grant previously paid where that decision is later reversed and impose a penalty in certain circumstances, including where a Grant is paid as a result of an applicant’s dishonesty.

Submissions

The Applicant’s application for review by the Tribunal was lodged several days after the relevant date of 28 days after he was notified that his objection was disallowed. However the Tribunal exercised its discretion to extend the time for making the application to 3 December 2021.

The Applicant submitted that he had met the residence requirement, by occupying the Grant Property as his principal place of residence for a period of greater than six months commencing within the 12 months following the date of completion, being 7 January 2016 (“the relevant period”). In support of his submissions, the Applicant produced substantial documentary material that he claimed established that he did occupy the Grant Property as his principal place of residence in order to meet the residence requirement.

The Chief Commissioner submitted that the Applicant had not satisfied the onus to establish his occupation of the Grant Property in compliance with the residence requirement. In particular, the Chief Commissioner pointed to a number of inadequacies in the Applicant’s evidence, including:

• inconsistencies as to when the Applicant claimed to reside at the Grant Property;
• the supporting evidence provided, including electricity bills and car registration documents, was not determinative of the Applicant’s actual residence;
• much of the supporting evidence from the Applicant’s friends and family was incomplete, inconsistent and contradictory;
• some of the evidence provided by the Applicant indicated that the Grant Property was occupied by tenants during the relevant period who paid rent to the Applicant; and
• evidence obtained by the Chief Commissioner indicated that the Applicant was residing at an address in Burwood during the relevant period (at [35]).

The Chief Commissioner further submitted that the penalty imposed on the Applicant was justified as the Grant appeared to have been paid as a result of the Applicant’s dishonesty. The Chief Commissioner pointed to the multiple opportunities afforded to the Applicant to provide a reasonable explanation as to his residence during the relevant period and the unsatisfactory nature of his explanations as indicative of the Applicant’s position not being an honest mistake (at [34]).

Decision

The Tribunal held that the Applicant had failed to discharge his onus of establishing, on the balance of probabilities, that he had satisfied the residence requirement.

The Tribunal held that much of the evidence submitted by the Applicant, including statements from friends and family, and documentary evidence including electricity bills, was inconsistent, unreliable and not determinative of the Applicant’s residence during the relevant period (at [51], [54] and [57]). Further, the Tribunal held that the evidence indicated that the Applicant was receiving rental income for the Grant Property during the relevant period and he had not provided a credible explanation as to the source of that rental income (at [60]-[61]).

Further, the Tribunal held that it could not accept the Applicant’s assertion that he did not reside at an address in Burwood during the relevant period in the face of significant evidence suggesting that he did in fact reside at Burwood. The Tribunal noted that much of the Applicant’s expenditure on retail items and domestic necessities occurred in the Burwood area and that the Applicant had, on three occasions during the relevant period, declared that a Burwood address was his intended residence on incoming passenger cards completed on arrival in Australia. The Tribunal was not satisfied that the explanations offered by the Applicant for these issues were credible (at [62] and [69]-[71]).

Given these findings, the Tribunal also held that it was open for the Chief Commissioner to decide to impose a penalty on the Applicant under s. 45 of the FHOG Act (at [74]).

Orders

1. The decisions of the Chief Commissioner that the Applicant was not eligible for a first home owners’ grant under the First Home Owner (New Homes) Act 2000 (NSW), that the initial decision to pay such a grant to the Applicant be reversed, that the Applicant be required to repay the grant and to impose a penalty of $4,500 on the Applicant are affirmed.
2. The time for making the application is extended to 3 December 2021.

Link to decision

https://www.caselaw.nsw.gov.au/decision/18184b99b0928d85521df0b7