Darby v Commissioner of State Revenue [2016] QCAT 193

CITATION: Darby v Commissioner of State Revenue [2016] QCAT 193 PARTIES: Robert Darby (Applicant) v Commissioner of State Revenue (Respondent) APPLICATION NUMBER: GAR300-15 MATTER TYPE: General administrative review matters HEARING DATE: On The Papers HEARD AT: Brisbane DECISION OF: Member Hughes DELIVERED ON: 28 June 2016 DELIVERED AT: Brisbane ORDERS MADE: The Commissioner of State Revenue’s decision to confirm the decision to refuse the application for the First Home Owner’s Grant is confirmed. CATCHWORDS: GENERAL ADMINISTRATIVE REVIEW - FIRST HOME OWNER GRANT ––– DISPLAY HOME - whether ‘eligible transaction’ - whether ‘new home’ – whether property ‘sold as a place of residence’ – where property rented back to builder to use as display home - where property transferred as dwelling - where test for ‘sold as a place of residence’ is objective and does not depend on parties’ acts and intentions – where home built to be lived in – where home displayed for that purpose – where later agreement cannot alter purpose for which property built – where regardless of whether property used or displayed as place of residence, it was still built as place of residence – whether consistent with Parliament’s policy intent - where policy intent of Parliament is to benefit buyers of new homes and boost housing construction sector – where policy intent could have only been achieved when property built -- 1 of 5 -- 2 and first transferred First Home Owner Grant Act 2000 (Qld), ss 5, 10 Fiscal Repair Amendment Act 2012, s 15 Queensland Civil and Administrative Tribunal Act 2009 (Qld), ss 20, 23 Betts & Anor v. Commissioner of State Revenue [2013] QCAT 283 Gonzalez & Anor v. Commissioner of State Revenue [2015] QCAT 65 Harley v. Department of Justice and Attorney- General [2012] QCAT 620 Kehl v. Board of Professional Engineers of Queensland [2010] QCATA 58 APPEARANCES and REPRESENTATION (if any): This matter was heard and determined on the papers pursuant to section 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld). REASONS FOR DECISION What is this Application about? [1] Robert Darby bought a display home as his first home. The Commissioner of State Revenue refused his application for the first home owner grant because, in the Commissioner’s view, it was not a ‘new home’. Mr Darby has applied to the Tribunal to review the Commissioner’s decision. [2] The Tribunal may confirm, amend or set aside the Commissioner’s decision and substitute a new decision.1The Tribunal’s role is to produce the ‘correct and preferable’ decision2 by way of a fresh hearing on the merits.3 This means that Mr Darby does not need to prove that the Commissioner’s decision is incorrect.4 Background [3] A first home grant is payable if the applicant complies with eligibility criteria5 and has completed an ‘eligible transaction’.6 Eligibility criteria of age, citizenship, no prior payment of the grant and no prior interest in residential property were not 1 Queensland Civil and Administrative Tribunal Act 2009 (Qld) s 23(2). 2 Queensland Civil and Administrative Tribunal Act 2009 (Qld) s 20(1). 3 Queensland Civil and Administrative Tribunal Act 2009 (Qld) s 20(2). 4 Harley v. Department of Justice and Attorney-General [2012] QCAT 620 at [8], citing with approval Kehl v. Board of Professional Engineers of Queensland [2010] QCATA 58 at [9]. 5 First Home Owner Grant Act 2000 (Qld) s 10(1)(a). 6 First Home Owner Grant Act 2000 (Qld) s 10(1)(b). -- 2 of 5 -- 3 in issue. The issue here was whether Mr Darby completed an ‘eligible transaction’. [4] Because Mr Darby entered into the contract to buy the home on 25 June 2015, the transaction is ‘eligible’ only if the home is a ‘new home’.7 Did Mr Darby buy a ‘new home’? [5] Mr Darby submitted that the home was not built for the purpose of being resided in, used or sold as a residence. Rather, Mr Darby submitted that the home was built for the sole purpose of being used as a display home and it was used solely for that purpose for many years until he purchased it. Mr Darby noted that the home was rented back by the builder prior to selling it to him so that it could be used as a display home. Mr Darby also submitted evidence from the builder and from the first buyer’s solicitors to support his contention that the home was built for the purpose of leasing back to the developer as a display home.8 [6] Although the home may not have been ‘previously occupied’, unfortunately for Mr Darby, previously intending to use and then using a home for display purposes does not mean it was not ‘sold as a place of residence’ at that time. The Tribunal has previously noted that the test of ‘sold as a place of residence’ is objective and does not depend on the acts or intentions of the parties, but the predominant character of the property.9 It is not physically moving in or the parties’ intent that characterises the property, but the purpose for which it is built.10 [7] The purpose for which the property was built is clear from the Transfer document of the previous sale. This shows ‘current land use’ as ‘dwelling’ and not industrial, commercial, etc.11 This means that the property was sold as a place to ‘dwell’ in, that is, to live in or reside. That it can be used or rented as a display does not obviate from this. The home was built to be lived in. It is being displayed for that purpose: as a place to live in. It is not, for example, being displayed as commercial or industrial premises. [8] Whether the home was in fact lived in or resided in – or displayed - does not change its essential character. Simply because the first buyer intends – at least initially – to use it for display does not derogate from its fundamental character as a dwelling. Its predominant character is that of a residence and within that context, it was used as a display home under a Tenancy Agreement for a term of 24 months. 7 First Home Owner Grant Act 2000 (Qld) s 5(1)(a), (2)(a). 8 Letter OWNit Conveyancing to Radcliff Taylor Lawyers dated 25 August 2015; Letter Planbuild Homes dated 14 September 2015; Tenancy Agreement between Richard Lawrie and Lynda Lawrie as Landlord and Planbuild Homes Pty Ltd as Tenant dated 24 May 2013. 9 Betts & Anor v. Commissioner of State Revenue [2013] QCAT 283 at [20]. 10 Gonzalez & Anor v. Commissioner of State Revenue [2015] QCAT 65 at [9]. 11 Property Information (Transfer) Form 24 dated 24 June 2013. -- 3 of 5 -- 4 [9] The property did not stop being a place of residence while under a Tenancy Agreement or being used as a display home. Parties cannot by later agreement alter the purpose for which the property was built. Regardless of whether the property was used or merely displayed as a place of residence, it was still built for that purpose and its essential character remains: as a place of residence. [10] This means that Mr Darby did not enter into a contract for the purchase of a ‘new home’. The contract is therefore not an ‘eligible transaction’ that would entitle Mr Darby to the First Home Owner Grant. Is this consistent with Parliament’s policy intent? [11] Mr Darby was concerned that the “spirit of the law” is being overlooked in this case. In Mr Darby’s view, the purpose of the first home owner grant is to stimulate growth in the building industry and help people own their own home. He believes that the second point has been forgotten. [12] Unfortunately for Mr Darby, Parliament has not expressed these as separate points but has integrated them into one policy intent: to restrict the grant only to first home buyers who build or buy a new home12 and boost the housing construction sector (my emphasis): [The Fiscal Repair Amendment Bill] discontinues the grant for existing homes from 11 October 2012. The First Home Owner Grant originally compensated first home buyers for the increase in housing costs due to the goods and services tax. The current consensus is that the grant is a relatively inefficient mechanism for improving home affordability. However, an increased grant for first home buyers purchasing a new home will benefit first home buyers and boost the housing construction sector.13 [13] Parliament’s policy intent is currently not as broad as simply helping people own their own home. As the Tribunal has previously noted,14 since 2012 Parliament has amended the definition of ‘eligible transaction’ to restrict the grant only to buyers of ‘new homes’.15 [14] Parliament could only have achieved its policy intent to help first home buyers and boost the housing construction sector when the property was built and first transferred.16 That happened before Mr Darby purchased it. What if Mr Darby was led to believe his application would be approved? 12 Fiscal Repair Amendment Bill 2012 Explanatory Notes at 2 and 10. 13 Minister’s Second Reading Speech, Queensland Hansard 11 September 2012 at 1823. 14 Gonzalez & Anor v. Commissioner of State Revenue [2015] QCAT 65 at [14]. 15 Fiscal Repair Amendment Act 2012, s 15. 16 Betts & Anor v. Commissioner of State Revenue [2013] QCAT 283 at [20]. -- 4 of 5 -- 5 [15] Mr Darby said that staff in the Office of State Revenue said in many conversations before the purchase that there should not be any issues with his application for the grant. He said that this led him to believe that if he provided the requested information his application would be approved “without doubt”. [16] Mr Darby would be understandably disappointed if he was led to believe that he was eligible for the grant. However, this cannot change the fact that his application can only be assessed according to law. It is incumbent upon Mr Darby to conduct proper checks on the property he is purchasing and obtain proper professional advice. What is the ‘correct and preferable’ decision? [17] The ‘correct and preferable’ decision is to confirm the Commissioner’s decision to refuse the application for the First Home Owner’s Grant. -- 5 of 5 --