Commissioner of State Revenue v Bielefeld [2016] QCATA 46

CITATION: Commissioner of State Revenue v Bielefeld [2016] QCATA 46 PARTIES: Commissioner of State Revenue (Applicant) V Jacqueline Kate Bielefeld (Respondent) APPLICATION NUMBER: APL258-15 MATTER TYPE: Appeals HEARING DATE: 30 November 2015 HEARD AT: Brisbane DECISION OF: Senior Member Stilgoe OAM Member Allen DELIVERED ON: 7 March 2016 DELIVERED AT: Brisbane ORDERS MADE: 1. Appeal dismissed CATCHWORDS: APPEAL – REVENUE - First Home Owners Grant – whether error of law in allowing grant in respect of contract for the removal and relocation of a house First Home Owners Grant Act 2000 (Qld) ss 5, 6, 10 Queensland Civil and Administrative Tribunal Act 2009 (Qld) s143, 146 APPEARANCES: APPLICANT: Mr Scott of Counsel instructed by Crown Law RESPONDENT: Ms Bielefeld in person REASONS FOR DECISION [1] Jacqueline Bielefeld applied to the Commissioner of State Revenue for the First Home Owners Grant (“FHOG”) in respect of a building that was relocated and then fixed to her land at Nobby. Ms Bielefeld entered a -- 1 of 7 -- 2 residential building contract on 1 June 20131 and the building reached final certification on 22 October 20132. Her application for the FHOG was refused. She made an application to the Tribunal for review of that decision and a Tribunal member determined that the correct and preferable decision was that she completed an eligible transaction for the Grant. [2] The Commissioner has now appealed that decision. The grounds of appeal are as follows:- a) The Tribunal misconstrued s6(2)(a) of the Act. The tribunal erroneously construed s6(2)(a) as applying to renovated homes; and b) The Tribunal misconstrued s6(3)(a) of the Act by holding that a building contract is ‘a contract for the purchase of a home’. [3] These grounds of appeal are questions of law and leave is not necessary. Where an appeal is on a question of law the appeal tribunal may confirm or amend the decision, set aside the decision and substitute its own decision or set aside the decision and return the matter for reconsideration as directed by the appeal Tribunal3. What is the structure of the FHOG Act? [4] A FHOG is payable where the applicant complies with the eligibility criteria and the transaction for which the grant is sought is an eligible transaction and has been completed4. The original decision dealt solely with the question of whether or not the transaction is an eligible transaction. [5] The FHOG Act in Part 2 Division 2 - Basic Concepts defines the terms used in the Act. Relevantly s5(1) defines an eligible transaction as:- (a) A contract made on or after 1 July 2000 for the purchase of a new home in the State; or (b) A comprehensive home building contract made by the owner of land in the State, or a person who will on completion of the contract be the owner of the land in the State, to have a new home built on the land, if the contract is made on or after 1 July 2000. [6] Section 5(2) further defines an eligible transaction as: (a) A contract made on or after 1 July 2000 but before 11 October 2011 for the purchase of a home, other than a new home, in the State; (b) a comprehensive home building contract made by the owner of land in the State to have a home, other than a new home, built on the land, if the contract is made on or after 1 July 2000 but before 11 October 2012. 1 Tribunal reasons at [4] 2 Tribunal reasons at [22] 3 QCAT Act, s 146 4 First Home Owners Grant Act 2000 (Qld), s 10 -- 2 of 7 -- 3 [7] Sections 5(1)(a) and 5(2)(a) are subject to s5(3) which states: …a contract is a contract for the purchase of a new home or other home if the contract is a contract for the acquisition of a relevant interest in land on which (a) a new home or other home is built or (b) on which a new home or other home is to be built, before completion of the contract, by or for the vendor and at the expense of the vendor. [8] Section 6 provides the meanings of “home” and “new home”. A “home” is in accordance with s6(1) a building, fixed to land, that: (a) may lawfully be used as a place of residence; and (b) is a suitable building for use as a place of residence. [9] A “new home” is in accordance with 6(2) a home that: (a) has not been previously occupied or sold as a place of residence; or (b) is a substantially renovated home. [10] The requirements for a substantially renovated home are set out in section 6(3). They are that the home is the subject of a contract for the purchase of the home; the sale of the home under the contract constitutes a taxable supply as a sale of new residential premises; and the home, as renovated, has not been previously occupied or sold as a place of residence. Did the tribunal misapply s6(2)(a) of the act? [11] As Ms Bielefeld entered her contract on 1 June 2013, the learned member rightly determined that it could only be an eligible transaction if the contract related to a “new home”5 . This is because a transaction in relation to a home that is not a new home will only be an eligible transaction if it was made before 11 October 2012 in accordance with s5(2). [12] The learned member firstly considered how and when Ms Bielefeld acquired her home, having regard to the definition in s6(1). He noted that ‘Ms Bielefeld had entered a contract to build – to have the Builder undertake building work. The work was to build a home and included the Builder removing and relocating an unspecified house.’6 [13] The learned member considered that ‘when the builder removed and relocated the building form 6 View Street, South Toowoomba, Ms Bielefeld acquired something that was not fixed ‘fixed to land’, could not ‘lawfully be used as a place of residence’ and ‘was not‘ suitable for use as a place of 5 Reasons at [5] 6 Reasons at [9] -- 3 of 7 -- 4 residence’ it was not a ‘home’. At most, it would simply be a building, rather than a home’.7 [14] He found that ‘the building did not meet building compliance standards in its former state and was to be demolished. Ms Bielefeld was therefore not to take possession until the building was certified. This required major structural changes including new plans, replacing brick foundations with new steel stumps, footings, bearers, plumbing. Once this work was done, the building was certified as complete and compliant with Council standards. At that point, it ‘fixed to (Ms Bielefeld’s) land’, could ‘lawfully be used as a place of residence’ and was a ‘suitable building for use as a place of residence – it had become a home’8. The Commissioner did not raise any question in regard to this analysis by the learned member. [15] The learned member then considered whether the contract was in respect of a new home. A new home is a home, so the question of whether it was a new home must be considered at the same point in time as when the learned member considered whether it was a home. In this case, that point in time was when the building was certified having regard to the learned member’s analysis described above. [16] He firstly considered whether it was a new home in accordance with s6(2)(a).9 The Commissioner considers that the Tribunal’s error in relation to s6(2)(a) can be seen at [18] of the learned Member’s reasons: I am not satisfied that Ms Bielefeld’s home was ‘previously occupied or sold as a place of residence’. Ms Bielefeld did not simply engage the Builder to perform a cosmetic makeover. While the original building that was ultimately relocated to her house may at some point have been ‘previously occupied as a place of residence’ her ‘home’ is not that building. The evidence suggests that the building underwent substantial change. [17] The Commissioner submitted that this approach involved a misconstruction of s6(2)(a) because the section does not apply to pre-existing renovated homes. The Commissioner submits that these contracts are dealt with by s6(2)(b). The Commissioner submits that s 6(2)(b) would be otiose if it was intended that s 6(2)(a) included a home that was the subject of substantial renovations. [18] The Commissioner submits that an interpretation that extends the operation of s 6(2)(a) to renovated homes is improbable for two reasons. Firstly, when construing a statutory provision, the tribunal is required to give meaning to every word of the provision10, and the tribunal’s approach does not meet this objective. Secondly, the Commissioner submits, it was evident that 7 Reasons at [13] 8 Reasons at [14] and [15] 9 Reasons at [18] to [22] 10 Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355 at 382 -- 4 of 7 -- 5 Parliament intended that a renovated home would only be a “new home” in very limited circumstances. [19] However, a fair reading of [18] of the learned member’s reasons does not accord with the Commissioner’s submissions. The learned member did not interpret s6(2)(a) as applying to renovated homes. This is clear when consideration is given to the previous finding that in accordance with s(6)(1), the building did not become a home until it was affixed to Ms Bielefeld’s land and the building work was complete and certified. The learned member was therefore, in accordance with 6(2)(a), considering whether the home, that is the building as completed and certified on Ms Bielefeld’s land, was a new home. [20] The learned member acknowledged that while the structure ‘may at some point have been previously occupied as a place of residence’ at the point it was moved to Ms Bielefeld’s property it was not “fixed to land”’ nor was it able to serve as a place of residence. He found that it was not a home and, therefore, could not be regarded as a home that has been previously occupied. [21] The learned Member differentiated between the original building that was relocated (which may have previously been used as a place of residence) and Ms Bielefeld’s home which, the learned member found, was not one that had previously been occupied as a place of residence. The learned member was at pains to make it clear that the building which had previously formed part of a home when affixed to land elsewhere was now building material and had undergone substantial work so that it could be certified for use as a home at its new location. [22] That was a finding of fact. If the Commissioner is taking issue with the finding of fact, then that is a question of mixed fact and law for which leave is necessary. [23] The appeal tribunal will not usually disturb findings of fact on appeal if the evidence is capable of supporting the conclusions.11 An appellate tribunal may interfere if the conclusion is ‘contrary to compelling inferences’ in the case.12 The evidence can support the learned member’s findings and we can find no compelling reason to come to a contrary view. [24] The learned member did not misconstrue s6(2)(a). It is clear though that in analysing eligibility for the FHOG based firstly on a consideration of whether a home was a new home does not accord with the Act. Section 5 defines eligible transactions as particular types of contracts for the purchase of a new home or to have a new home built. Section 6 then defines the terms ‘home’ and ‘new home’. Therefore, the transaction should be analysed firstly to determine what type of contract it is. If it is one of the specified types then, 11 Dearman v Dearman (1908) 7 CLR 549 at 561; Fox v Percy (2003) 214 CLR 118 at 125-126. 12 Chambers v Jobling (1986) 7 NSWLR 1 at 10. -- 5 of 7 -- 6 and only then, consideration must be given to whether it is for a new home to finally determine if it is an eligible transaction. Did the tribunal misapply s6(2)(b)? [25] The Commissioner submitted that the tribunal erred in finding that the home fell within the meaning of “substantially renovated home” under s6(2)(b). Such a home must be “the subject of a contract for the purchase of a home”13. The Tribunal construed the phrase as including contracts to build homes14. The Commissioner submits that this was the tribunal’s error. A contract to build a home is demonstrably not a contract to purchase a home. [26] The learned member’s reasons show that he construed the requirement that the contract for the purchase of a home included acquisition of an interest in land only applied in regard to transactions under s5(1)(a), as it is read subject to s5(3). That s5(3) did not apply in relation to a comprehensive home building contract under s5(1)(b)15. He stated that ‘the contract is a residential building contract for a “new residence as per quotation”...Once constructed, the building could ‘lawfully be used as place of residence’ and was ’suitable as place of residence.’16 On that basis he was satisfied that it was a contract for the purchase of the ‘home’ for the purposes of s6(3)(a)17. [27] The learned member is in error because he has treated the requirements of a “substantially renovated home” in isolation. This is because he firstly considered whether the home was a new home instead of first looking at the type of transaction. He treated the requirements in s6(3) separately from those in s6(1) and s5(1). [28] Section 6(1) makes it clear that a home is a building fixed to land. So where s6(3) talks about a contract for the purchase of a home it is implied that it is a contract for a building fixed to land. [29] The first step must be to consider what type of transaction is involved. If there is a contract to purchase a new home under s5(1)(a) it must be a contract for the acquisition of a relevant interest in land in accordance with s5(3). There must be a new home built on the land. That can either be one not previously occupied or sold as a place of residence in accordance with s6(2)(a) or a substantially renovated home in accordance with s6(2)(b). [30] To determine if the purchase of a renovated home is an eligible transaction, section 5(1)(a) and s5(3) require consideration of the home built on the land at the time of acquisition to determine whether or not it is, or will be before the completion of the contract a substantially renovated home in accordance with s6(2)(b) and s6(3). 13 S6(3)(a) 14 Reasons at [29] 15 Reasons at [27] 16 Reasons at [28] 17 Reasons at [29] -- 6 of 7 -- 7 [31] In contrast, a transaction which is an eligible transaction as a comprehensive home building contract under s5(1)(b) requires that it is made by the owner of land or a person who will at the end of the contract be the owner of land to have a new home built on the land. [32] A comprehensive home building contract is, relevantly defined in the Act’s Schedule as, 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. [33] The requirement to build a home from the start of building work is not consistent with the concept of renovation, which ordinarily relates to work done on a pre-existing home. Therefore, an eligible transaction under s5(1)(b) cannot be one in respect of a substantially renovated home and the learned member’s argument in that regard is in error. Section 6(2)(b) does not apply to a comprehensive home building contract transaction. [34] While the learned member fell into error in his interpretation of the requirements of s6(2)(b) the appeal’s tribunal notes that he found that the transaction was not a contract for the purchase of a new home, for the purposes of s5(1)(a) as Ms Bielefeld did not acquire an interest in land. Therefore, the error did not affect his decision. Should the appeal be allowed? [35] The learned member determined that Ms Bielefeld’s contract was in respect of a comprehensive home building contract18. He was satisfied that the substantial work19 in transforming the building into a home under the contract was sufficient to equate to building a home from the start20. He had also considered whether it was a new home at the time of final certification. He was satisfied that in its completed state it had not previously been occupied or sold as a place of residence and is therefore a “new home”. He therefore found that it was a comprehensive home building contract to build a new home. While the learned member’s analysis was not in the correct order that did not affect the validity of his decision. [36] The appeal is dismissed 18 Reasons at [45] 19 Reasons at [41] 20 Reasons at [44] -- 7 of 7 --