Conaghan v Commissioner of State Revenue [2023] QCAT 253

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL CITATION: Conaghan v The Commissioner of State Revenue [2023] QCAT 253 PARTIES: STEPHEN KENNETH CONAGHAN (applicant) v THE COMMISSIONER OF STATE REVENUE (respondent) APPLICATION NO/S: GAR596-21 MATTER TYPE: General administrative review matters DELIVERED ON: 6 July 2023 HEARING DATE: 8 March 2023 20 April 2023 HEARD AT: Brisbane DECISION OF: Member Poteri ORDERS: The First HomeOwner Grant should be paid to Stephen Kenneth Conaghan. CATCHWORDS: Where an application for a HomeBuilder grant has been made to the Commissioner pursuant to provisions of the First Home Owner Other Home Owner Grants Act 2000 (Qld) – where the Commissioner has decided that the contractual arrangements for the erection of the dwelling house do not satisfy the statutory requirements of the First Home Owner Other Home Owner Grants Act 2000 (Qld) and its subordinate legislation – Where the home owner alleges that the contract arrangements are contained in a comprehensive home owner building contract as required under the provisions of the First Home Owner Other Home Owner Grants Act 2000 (Qld) and its subordinate legislation. First Home Owner Grant and Other Home Owner Grants Act 2000 (Qld), s 25Q, s 59, s 60 Administrative Direction – Australian Government HomeBuilder Grant Queensland -- 1 of 7 -- 2 APPEARANCES & REPRESENTATION: Applicant: Self Represented Respondent: Ms G Hartridge instructed by the Commissioner of State Revenue REASONS FOR DECISION [1] The Applicant, Stephen Kenneth Conaghan (Conaghan) is the registered proprietor of land (Property) situated at 211 Angela Road, Rockyview. On 16 August 2020 Conaghan entered into a building contract (Contract) with Ben Hooper (Hooper) to erect a dwelling house (Home) on the Property. [2] These proceedings relate to an application (Application) made by Conaghan to the Commissioner of State Revenue (Commissioner) for a HomeBuilder grant (Grant) pursuant to the provisions of the First Home Owner Grant and Other Home Owners Grants Act 2000 (Qld) (FHOG Act). On 9 June 2021 the Commissioner decided (Decision) to reject the Application. The Decision was confirmed in an internal review on 20 August 2021. [3] Conaghan has made an application pursuant to s59 of FHOG Act to the Tribunal for an external review of the Decision. Pursuant to s60(2)(a) of the FHOG Act the Tribunal must hear and decide the review of the Decision by way of a reconsideration of the evidence that was before the Commissioner when the Decision was made unless the Tribunal considers that it is necessary in the interests of justice to allow new evidence. Conaghan sought to introduce new evidence relating to the contract arrangements with Hooper, and their electrician, Todd Riley (Riley) of Trecs Electrical. Ms Hartridge consented to this evidence being adduced provided Hooper and Riley gave oral evidence and were subject to cross-examination. [4] The hearings of these proceedings were heard on 8 March and 20 April 2023. LEGISLATION, LEGAL ISSUES AND FIRST HOME GRANT SCHEME [5] The first home grant scheme (Scheme) is a well publicised Scheme which was established between the Commonwealth and State governments to encourage and assist home ownership and to provide grants to eligible first home owners. The Scheme has been the subject of many decisions in the Tribunal. It is not necessary for me to outline all the facts and circumstances of the Scheme. In respect of the applications for Grants, it is the Commissioner’s position that all applicants must comply with all the legislative criteria of the Scheme to be entitled to a Grant. [6] The relevant legal issues that are central to this review are: (a) Is the Contract an “eligible home builder transaction” as outlined in s25Q of the FHOG Act? and (b) Is the Contract a “comprehensive home builder contract” as outlined in the provisions of the relevant administrative direction? [7] The legislative provisions relevant to this review are outlined: 25Q Application for grant and when grant is payable -- 2 of 7 -- 3 (1) A person who is eligible to apply for a home builder grant under the home builder direction may apply for the grant. (2) An application for a home builder grant must comply with the home builder direction. (3) An applicant for a home builder grant is entitled to be paid the grant if— (a) the applicant or, for a joint application, each of the applicants, complies with the eligibility criteria for the grant under the home builder direction; and (b) the transaction for which the grant is sought is an eligible home builder transaction; and (c) the relevant requirement in relation to the eligible home builder transaction has been met. Note— See also section 25R(2). (4) Only 1 home builder grant is payable for the same eligible home builder transaction. (5) In this section— relevant requirement, in relation to an eligible home builder transaction, means— (a) if the transaction is a contract for the purchase of a new home within the meaning of the home builder direction—the contract has been completed within the meaning of the home builder direction; or (b) if the transaction is a comprehensive home building contract within the meaning of the home builder direction—the foundations have been laid and the first progress payment has been paid to the builder under the contract; or (c) if the transaction is a contract for a substantial renovation within the meaning of the home builder direction— construction under the contract has commenced and at least $150,000 of the contract price has been paid to the builder under the contract. ADMINISTRATIVE DIRECTION – Australian Government HomeBuilder Grant – Queensland - 1 March 2021 – Paragraphs 1b & 14 Eligible transactions 1. Each of the following transactions are eligible transactions for payment of the grant: b. a comprehensive home building contract made by the freehold owner of land in Queensland, or a person who will, prior to completion of the comprehensive home building contract be the freehold owner of land in Queensland, to have a new home built on the land, if the contract commencement date is between 4 June 2020 and 31 March 2021 (both -- 3 of 7 -- 4 dates inculsive), and the contstruction commencement date is on or after the contract commencement date and within 6 months of the contract commencement date. 14. A comprehensive home building contract means a contract under which a builder undertakes to build a home from the start of building work to the point where the home is ready for occupation and, if for any reason, the work to be carried out under the contract is not completed, includes any further contract under which the work is to be completed. [8] It should be noted that the provisions of the Administrative Directions are amended and updated periodically. For example the Administrative Direction dated 30 October 2020 is exhibited on pages 158 to 164 of the material filed by the Commissioner in the Tribunal on 14 December 2021. The operative provisions relating to the definition of “eligible transaction”and “comprehensive home building contract” are basically the same in both Administrative Directions. BACKGROUND [9] Conaghan and his partner, Lara, gave evidence by Teams. I will refer to Conaghan and Lara as the Conaghans. They mainly gave their evidence in concert and advised the Tribunal that they are not conversant with all the legal issues and laws relating this review. Except for the purchase of the Property, they did not use lawyers and they finalised all the contract arrangements for the building of the Home and the application for the Grant themselves. At all times they assumed that they were complying with all laws and regulations relating to the building of the Home and their eligibility for the Grant. [10] The Conaghans decided to register the Property in Stephen’s name only and this caused some difficulties when Conaghan applied for a loan to fund the cost of the building of the Home. There was a shortfall in the amount that the bank would advance to Conaghan and the cost of the building of the Home. To solve this problem, they arranged for Trecs Electrical to be paid separately from other funds. They say they were able to do this with Trecs Electrical because they had used Trecs Electrical previously and they knew that the quality of their work was good. [11] In Appendix Part E of the Contract “all electrical including .it(sic) off” and “all air conditioning units” are excluded from the Contract. The electrical work was to be undertaken by Trecs Electrical. [12] Certain details of the contract arrangement between Conaghan, Hooper and Trecs Electrical were provided to the Commissioner in correspondence and communications between Conaghan and the Commissioner. Although Conaghan provided certain details, such as the relevant certificates and invoices from Hooper, he did not provide the full details of the arrangements with Trecs Electrical and Hooper. Why this was the case was not fully explained. The reason may be that the Conaghans were not fully familiar with these types of legal arrangements, and this was the first time that they had made such arrangements. [13] The Conaghan’s application was rejected because the Commissioner says that Conaghan has not complied with s25Q of the FHOG Act because the Contract is not an eligible home builder transaction. That is the contract arrangements with Trecs Electrical to undertake the electrical fit off for the Home is separate to the contract arrangements with Hooper. The Commissioner says that the separate contract -- 4 of 7 -- 5 arrangements does not satisfy the definition of “a comprehensive home building contract” as set out in the provisions of the Administrative Direction. [14] In summary the Commissioner says that a comprehensive home building contract means that the builder must undertake all the work with his subcontractors to build the Home from the start of building work until the home is ready for occupation. That is no other work can be undertaken on the Home in separate contract arrangements with the owner. ORAL EVIDENCE OF CONAGHANS, HOOPER AND RILEY [15] The contract arrangements were outlined further after the Conaghans, Hooper and Riley gave evidence and were cross examined by the Ms Hartridge. The evidence: (a) The Conaghans,Riley and Hooper did not take legal advice or use lawyers in the formulation of the various contract arrangements for the erection of the Home; and (b) The Conaghans entered into the Contract in August 2020. Around the same time the Conaghans contacted Trecs Electrical to have them undertake the electrical fit out and the installation of the electrical equipment for the Home. The Conaghans had used Trecs Electrical previously and they were aware of the good quality of their work; and (c) Trecs Electrical did provide a quote dated 3 September 2020 to the Conaghans. This quote was the subject of a separate hearing on 20 April 2023. The Conaghans say that this quote was eventually reduced to an amount of some $25,000 which was paid in 2 payments to Trecs Electrical. The first payment of approximately $12,000 to $13,000 was paid by the Conagahans directly to Trecs Electrical. The Conagahans could not recall the exact date and amount of this payment. This account was never produced to the Tribunal. A further payment of $11,916.30 was made by Hooper to Trecs Electrical regarding an account from Trecs Electrical dated 23 June 2021. A copy of this account is on pages 55 and 56 of the Commissioner’s documents filed in the Tribunal on 14 December 2021; and (d) Around the time of the execution of the Contract, Conaghan requested that Hooper use Trecs Electrical to undertake the elctrical fit off for the Home and Conaghan would pay for the accounts of Trecs Electrical. As outlined above these accounts were paid by 2 payments; and (e) It is noted that although the Trecs Electrical quote dated 3 September 2020 is addressed to Conaghan, the Trecs Electrical account dated 23 June 2021 is addressed to “Hooper Construction”; and (f) The Conaghans gave evidence that they had little contact with Trecs Electrical after the initial contact with Trecs Electrical regarding the quote and the acceptance by Hooper to use Trecs Electrical for all the electrical work for the Home. The Conaghans said that they had a walk through of the Home with Riley and Hooper to establish where all the light and electrical fittings would be situated. Hooper coordinated and facilitated all electrical work for the Home with Trecs Electrical; and (g) The Conaghan’s contact with the other sub-contractors working on the Home for Hooper was the same as that of Trecs Electrical; and -- 5 of 7 -- 6 (h) Riley gave evidence that he had a very professional relationship with the Conaghans and he did not offer them any discount. He said that he had discussions with the Conaghans a few months before the build and once the quote was accepted by the Conaghans he mainly dealt with Hooper. He confirmed that he made the arrangement with Hooper that he would undertake the electrical work and payment would be made by the Conaghans. He said that he assumed that he was Hooper’s subcontractor, their arrangement was oral and, he said this type of arrangement is not unusual; and (i) Riley said that he would have liaised with Hooper about 5 to 10 times during the build and he had a copy of the plans but not a copy of the Contract. He said that he rarely sees the building contract when he is doing this type of work. He said that he had never worked with Hooper before this build, but he knew of him; and (j) Riley said that he assumed that his work was covered by the statutory home warranty scheme with the Queensland Building and Construction Commission (QBCC) but that there were no discussions between Hooper and himself regarding any insurance. Riley said that Trecs Electrical have their own insurance; and (k) Hooper gave evidence and he stated that after discussions with the Conaghans he agreed to the arrangement that Trecs Electrical would be his sub-contractor and that the Trecs Electrical accounts would be paid by the Conaghans. He said that in fact he paid one account to resolve a variation. He said the use of sub- contractors recommended by owners is not unusual; and (l) Hooper stated that there was no discussion of insurance with Riley, but he assumed that there was a leeway of 15% to 20% in the cost of a build regarding the compliance with QBCC requirements. He said that he assumed that he had insurance cover for small variations; and (m) Hooper said that Trecs Electrical was his sub-contractor and he assumed all responsibility for the work of Trecs Electrical; and (n) Hooper could not recall exactly how the Contract was varied to include the electrical work of Trecs Electrical. He believed that the variation of the Contract was probably undertaken orally; and (o) Hooper, Riley and the Conaghans confirmed that the Home was constructed in accordance with the Contract and that no issues arose during the build. They believed that all terms and conditions of the various contract and subcontract arrangements were properly carried out by the respective parties and stakeholders. FINDINGS [16] During the proceedings Ms Hartridge raised a number of issues in cross examination of the witnesses regarding the validity of the contract arrangements. These issues included that the variations to the Contract were undertaken orally instead of being in writing, QBCC may not have been informed of any possible requirement to increase the home warranty insurance and the subcontract arrangements with Trecs Electrical were formulated orally. Hooper, Riley and the Conaghans all confirmed that all works under the Contract and subcontract arrangements were carried out satisfactorily and -- 6 of 7 -- 7 Hooper and Riley have been paid all the monies due to them. On this basis I must presume that the contract arrangements are valid. [17] There is no question that full details of the exact contract arrangements were not provided to the Commissioner in the assessment of the Application and the internal review of the Decision. However, these contract arrangements have been further explained in oral testimony by the Conaghans, Hooper and Riley. Whilst the contract arrangements seem untidy, my assessment of the witnesses is that they are ordinary and honest people and I have no reason to disbelieve them. [18] My role as the decision maker in this review is to determine if the Application for a Grant complies with the statutory requirements of FHOG Act and its subordinate legislation. [19] On balance after hearing and reviewing the evidence before the Commissioner and the oral testimony, I am satisfied that the contract arrangements between Conaghan, Hooper and Riley to build the Home are contained in one comprehensive home building contract from the commencement of construction until the time when the Home was ready for occupation by Conaghan. [20] I am satisfied that Conaghan and Hooper varied the Contract, probably sometime after the Contract was executed in August 2020 to include all the electrical fit out and electrical work by Trecs Electrical. The exact circumstances of the variation are not clear. However, pursuant to the variation, Trecs Electrical would become a sub- contractor of Hooper for the electrical fit out and Conaghan would pay Trecs Electrical for their work. As it transpired Conaghan paid Trecs Electrical only one payment and the second payment to Trecs Electrical was paid by Hooper. [21] I am satisfied that Riley/Trecs Electrical was a sub-contractor of Hooper regarding the electrical fit out for the Home. [22] The amount paid by Conaghan for the construction of the Home was approximately $389,000, being the contract sum in the Contract and approximately $25,000 paid to Trecs Electrical for the electrical fit out. This total of approximately $414,000 is below the cap set out in the FHOG Act. [23] I am satisfied that the Contract is an eligible home builder transaction as set out in S 25Q of the FHOG Act and the Administrative Direction. [24] I am satisfied that Conaghan has satisfied all the other requirements of the FHOG Act and the subordinate legislation in regard to the Application. [25] Therefore, it is my decision that the Grant should be paid to Conaghan. -- 7 of 7 --