Hashim v Chief Commissioner of State Revenue [2020] NSWCATAD 67

Background

The Applicant purchased Unit 29, 190-194 Burnett Street, Mays Hill NSW 2145 (“Property”) on 12 October 2018.

At the time of purchase, the Applicant’s name, but not the name of his wife (“Ms Abbassi”), was present on the Contract for sale and the Transfer of the Property. Further, a mortgage to enable purchase of the Property was obtained in the name of the Applicant only.

On 26 October 2018, the Applicant applied for the FHB duty exemption. The exemption application was initially approved by SAI Global, pursuant to the power provided in Part 6 Division 2 of the Taxation Administration Act 1996 to stamp such applications. Mr Hashim was listed as the only “eligible purchaser” on the application and declared that he was “an Australian citizen or permanent resident”.

On 19 November 2018, the Applicant made a first application for a FHOG (“First FHOG Application”). Ms Abbassi was listed as a spouse on the First FHOG Application but not as an applicant. Mr Hashim declared on the application that “at least one applicant [is] a permanent resident or Australian citizen”. The First FHOG Application was rejected by the Chief Commissioner on the basis that Mr Hashim was not a permanent resident or an Australian citizen at the date of the Contract for sale or Transfer. At all times, Mr Hashim has held and continues to hold a Partner (Provisional) visa (Subclass 309) (“Class 309 Visa”).

Following rejection of the First FHOG Application, the Applicant and his wife jointly made a second application for the FHOG (“Second FHOG Application”) on 17 January 2019. Mr Hashim declared in the Second FHOG Application that “at least one applicant [is] a permanent resident or Australia citizen”. The Second FHOG Application was rejected by the Chief Commissioner on the basis that Ms Abbassi, while an Australian citizen, did not hold a “relevant interest” in the Property pursuant to s. 5(4) of the FHOG Act.

The Applicant argued during the objection and appeal process that Ms Abbassi should be eligible to receive the FHOG because she held an equitable interest in the Property through a resulting trust. This position was not pressed by the Applicant at the hearing and was abandoned. For the avoidance of doubt, however, the Tribunal asked for oral submissions from the parties on this issue.

The Statutory Framework

The relevant legislation included the:

• First Home Owners Grant (New Homes) Act 2001; nbd
• Migration Act 1958 (Cth), s.30 Kinds of visas
  • (1) A visa to remain in Australia (whether also a visa to and enter Australia) may be a visa, to be known as a permanent visa, to remain indefinitely.
  • (2) A visa to remain in Australia (whether also a visa to travel to and enter Australia) may be a visa, to be known as a temporary visa, to remain:
    • (a) during a specified period: or
    • (b) until a specified event happens: or
    • (c) while the holder has a specified status.

Issues and Submissions

The Tribunal identified three “real” issues in dispute and a fourth potential issue, which are each dealt with below.

1. Permanent Residency

Pursuant to Division 2 of Part 2 of the FHOG Act, the applicant(s) must be an Australian citizen or permanent resident at the date of the eligible transaction to receive a FHOG.

As at the date of the Contract for Sale (being the eligible transaction), Mr Hashim held a Class 309 Visa and Ms Abbassi was an Australian citizen. Ms Abbassi, however, was not a party to the Contract of Sale.

Given that the Applicant abandoned the argument that Ms Abbassi held a relevant interest in the Property by virtue of her equitable interest, the only question remaining, therefore, was whether Mr Hashim was a permanent resident at the date of the Contract for Sale.

The Applicant submitted that although the Applicant was not a citizen on the date of the Contract for Sale, the Class 309 Visa entitled him to automatically be considered a permanent resident and remain in Australia indefinitely, and so fell within the definition of a “permanent visa” pursuant to s. 30(1) of the Migration Act 1958. The Chief Commissioner submitted that the Class 309 Visa was a temporary visa only.

2. Duty Exemption

Division 1, Part 8 of the Duties Act outlines stamp duty “exemptions and concessions” under the First Home Buyers Assistance Scheme. Section 73(5) of the Duties Act states that a “purchaser or transferee…is not eligible [for the exemption] unless the person is an Australian citizen or permanent resident.”

It was submitted by the Applicant that if the FHOG decision was incorrect, then the Applicant should be entitled to the FHB duty exemption. The Applicant also submitted that the Chief Commissioner was estopped or otherwise prevented from reversing the stamp duty exemption because it had initially been approved by SAI Global as delegated agent or authority of the Chief Commissioner.

The Chief Commissioner submitted that if the FHB duty exemption decision was correct, then the decision to revoke the exemption and to re-impose stamp duty should be confirmed.

3. Government Policy

The Applicant relied on s. 64 of the Administrative Decisions Review Act 1997 (“ADR Act”), which requires the Tribunal in determining any application for administrative review to give effect to any relevant government policy in force at the time that the relevant decision was made, except to the extent that the policy is contrary to law or produces an unjust decision.

The Applicant asked the Tribunal to consider the NSW Government policy concerning housing affordability across the State. The Chief Commissioner submitted that s. 64 had no force in this case because the section is applied to discretionary powers, and the provisions of the Duties Act and the FHOG Actthat were in dispute were not discretionary.

4. Ms Abbassi’s ownership – potential issue

Although it was not pressed by the Applicant at the hearing, the Applicant’s application for review and submissions included that Ms Abbassi, by her monetary contribution to the 10% deposit under the Contract for Sale and by her non-monetary contributions (such as childcare and domestic obligations), had an equitable interest in the Property. In the alternative, the Applicant asserted that he held a 50% interest in the Property on trust for Ms Abbassi. The Applicant therefore submitted that Ms Abbassi was a joint owner of the Property, had a relevant interest in the land, and was therefore eligible for the FHOG.

The Chief Commissioner referred to the declarations made by the Applicant in the First FHOG Application and the FHB duty exemption that he was the sole applicant, and asserted that there was no reliable evidence to support the claim of an equitable interest.

Decision

The Tribunal found that:

1. the Applicant, as a holder of a Class 309 Visa, was not a “permanent resident” as defined in s. 3 of the FHOG Act, and so was not entitled to a FHOG because he did not meet the eligibility criterion set out in s. 9 of the FHOG Act;
2. given the Applicant was not a permanent resident, and that the transaction entered into by the Applicant attracted stamp duty unless exempted, he was not entitled to the FHB duty exemption. The Applicant could not rely on Ms Abbassi’s citizenship in this regard as Ms Abbassi was not a purchaser under the Contract for Sale or a transferee of the Property under the Transfer, and only a purchaser or transferee could apply for a concession or exemption under the scheme. The Tribunal also found that the Chief Commissioner could not be regarded as bound to adhere to the decision of his delegate, SAI Global, because estoppel does not lie against the Chief Commissioner in the discharge of his duty to administer a taxation law (Gunasti v Chief Commissioner of State Revenue [2012] NSWADT 218 at [19]) and s. 79 of the Duties Act enables the Chief Commissioner to reassess the duty chargeable in respect of an agreement or transfer;
3. it was not satisfied that there was any “relevant government policy” in place, and if that was wrong, the giving effect to such a policy did not undermine the validity of the decisions under review. Further, the Tribunal found that s. 64 of the ADR Act did not require the Tribunal to give effect to such policy in circumstances where the applicant failed to meet the statutory criteria for the grant;
4. the evidence did not indicate the existence of a resulting trust in favour of Ms Abbassi, nor that she intended to create a trust relationship to the extent that she did provide any part of the purchase money;
5. even if Ms Abbassi did have an equitably interest in the Property, that did not make her an owner of the land in fee simple, nor did it give her any “relevant interest” in the Property for the purposes of s. 5 of the FHOG Act, and nor did it make her an “owner” or “transferee” for the purposes of Division 1 of the Duties Act. Ms Abbassi was therefore ineligible for the FHOG and the FHB duty exemption;
6. the inability of the Applicant to repay the duty is not a fact that can affect the validity of the decision, and referred to the line of authority to the effect that a taxation assessment cannot legally be challenged on the basis that it leads to an “unjust” result (Gunasti v Chief Commissioner of State Revenue [2012] NSWADT 218 at [58]; Commissioner of Taxation v Ryan (2000) 201 CLR 109 at [123]).

Orders

Having found that the FHOG decision was correct, and that the FHB duty exemption and stamp duty assessment were therefore correct, the Tribunal ordered that:

1. the Chief Commissioner’s decision to reject the Applicant’s application for a FHOG is affirmed; and
2. the Chief Commissioner’s decision to revoke the Applicant’s FHB duty exemption and to assess the Applicant as liable for stamp duty are confirmed.

Link to decision

https://www.caselaw.nsw.gov.au/decision/5e54614ce4b0c8604babc284