Paspaley v Chief Commissioner of State Revenue [2014] NSWCATAD 217

Date of judgement 9 December 2014 Proceeding No. 1360054
Judge(s) NS Isenberg, Senior Member
Court or Tribunal NSW Civil and Administrative Tribunal
Legislation cited Administrative Decisions Review Act 1997

Civil and Administrative Tribunal Act 2013

Land Tax Management Act 1956

Taxation Administration Act 1996
Catchwords Land tax – principal place of residence exemption – use and occupation – absences from former residence – election – definition of family
Cases cited B & L Linings Pty Ltd v Chief Commissioner of State Revenue [2008] NSWCA 187

Black v Chief Commissioner of State Revenue [2011] NSWADT 66

Carey v Chief Commissioner of State Revenue [2010] NSWADT 78

Chief Commissioner of State Revenue v Ferrington [2004] NSWADTAP 41

Chief Commissioner of State Revenue (RD) v McIlroy [2009] NSWADTAP 21

Chief Commissioner of State Revenue v Paspaley [2008] NSWCA 184

Commissioner of Land Tax v Christie [1973] 2 NSWLR 526

Cornish Investments Pty Limited v Chief Commissioner of State Revenue (RD) [2013] NSWADTAP 25

Flaracos v Chief Commissioner of State Revenue[2003] NSWSC 68

Ghali v Chief Commissioner of State Revenue [2013] NSWCA 340

McNally & Anor v Commissioner of State Revenue [2003] NSWSC 1118

Stoke-On-Trent Borough Council v Cheshire County Council [1915] 3 KB 699

Yen-Cheng Chuang & Anor v Chief Commissioner of State Revenue [2009] NSWADT 160

Summary

The Taxpayer (Ms Paspaley) sought a review of the Chief Commissioner’s land tax assessments for the 2008 to 2012 land tax years in respect of a residence in Sydney (the “Sydney Property”).

The Tribunal was not satisfied on the balance of probabilities that the Sydney Property was the Taxpayer’s principal place of residence for any of the relevant tax years. The Tribunal noted that a person may have more than one residence, but only one principal place of residence anywhere in the world for the purposes of the PPR exemption. The taxpayer used and occupied other residences in Darwin and Broome for extended periods and had spent considerably more time “eating, drinking and sleeping” at those other residences during the relevant periods. The Taxpayer used different addresses for various purposes such as utilities, bills and licences, often for convenience, and this did not provide clear evidence as to which of the residences was the Taxpayer’s principal place of residence.

Background

In August 2011 the Chief Commissioner commenced an investigation into the PPR exemption claimed by the Taxpayer. That investigation revealed that the Taxpayer appeared to have lived in the Sydney Property for several years after purchasing it in 1990. However, from approximately 1997 onwards the Taxpayer began to spend an increasing amount of time in northern Australia. In 1997, the Taxpayer purchased an apartment in Darwin, a short distance from her mother’s house.

In 2003, the Taxpayer purchased another, more substantial, property in Darwin. The Chief Commissioner formed the view that the Taxpayer resided principally in that property until sometime in or around 2006 when, on account of her myriad business interests, she began to spend the bulk of her time in Broome.

Prior to the hearing, the parties agreed to a statement that set out the number of nights the Taxpayer spent in various locations in each of the relevant tax years. That statement included the following table:

Location 2006 2007 2008 2009 2010 2011 2012
Sydney Property 48 18 54 30 66 63 174
1505/180 Ocean Street, Edgecliff 0 0 0 0 0 0 21
100 Cullen Bay Crescent (Darwin) 149 64 54 63 32 14 6
17 Hunter St, Broome 0 0 0 0 25 202 6
7 Lucas St, Broome 0 104 153 170 111 0 0
Hotel - Broome 50 15 0 0 0 0 0
Other AU 25 62 31 35 60 55 58
Hotel overseas 69 55 62 58 65 30 99
Transit 0 0 0 0 2 1 2
At sea 24 47 12 9 4 0 0

Issues

In seeking review of the Chief Commissioner’s decision, the Taxpayer submitted that:

  1. the PPR exemption applied to the Sydney Property;

  2. in the alternative, the concession for absences from a former residence set out in Clause 8 of Schedule 1A to the LTMA applied; and/or

  3. as a further alternative, if the Taxpayer’s family was found to have more than one PPR, the Sydney Property should be taken as the Taxpayer’s PPR pursuant to Clause 12 of Schedule 1A, which provides for an election to be made where a family has more than one PPR.

In response, the Chief Commissioner contended that the Taxpayer’s PPR was not the Sydney property after 1997, but rather other properties, first in Darwin, and subsequently in Broome.

The Chief Commissioner further submitted that it was not possible for the concession for absences for up to 6 years from a former residence to apply as the Sydney Property was not the Taxpayer’s former residence within the meaning of Clause 8 of Schedule 1A.

Finally, the Chief Commissioner submitted that the Taxpayer could not elect to have the Sydney property treated as her PPR under clause 12 of Schedule 1A because she had not established that the Sydney property was her PPR, and in any case her partner (who was the only other member of her family for the purposes of clause 12) did not own another property.

Decision

The Tribunal conducted a detailed examination of the evidence and submissions in light of the factors considered in the cases of Chief Commissioner of State Revenue v Ferrington [2004] NSWADTAP 4 and Black v Chief Commissioner of State Revenue [2011] NSWADT 66.

The Tribunal determined that from 1997 until sometime after the Taxpayer became aware of the investigation by the Chief Commissioner (i.e. around December 2011), the Taxpayer principally resided in properties other than the Sydney Property. Specifically, Senior Member Isenberg considered that the Taxpayer lived in Darwin between about 1997 and 2007, when she moved to Broome.

Senior Member Isenberg found that the evidence was consistent with the use of the Sydney home by the Taxpayer as a “trophy home” for entertainment and relaxation during the summer holidays, as a place for occasional special events and during stopovers in Sydney for business.

In those circumstances, the Tribunal was not satisfied that the discretion in clause 2(2)(b) of Schedule 1A of the LTM Act should be exercised in favour of the Taxpayer for any of the relevant tax years.

In view of the Tribunal’s findings as to the Taxpayer’s PPR, her submission in relation to the concession for prior occupation also failed. The Tribunal was not satisfied that the Taxpayer occupied the Sydney Property for a continuous six month period at any time from 1997 until at least December 2011. The Tribunal found that it was more likely that the Taxpayer moved from Darwin to Broome in 2007 rather than from Sydney to Broome.

Finally, the Tribunal decided that it was not open to the Taxpayer and her husband to elect to have one of their properties treated as a PPR pursuant to Clause 12 of Schedule 1A of the LTM Act. SM Isenberg found that Clause 12 could only apply where there were two or more residences owned, whether jointly or separately, by two or more members of a family. Accordingly, as the Taxpayer’s husband did not own any property (either jointly or separately), it was not possible for an election to be made.

SM Isenberg concluded (at 201) that:

“The submissions that the Sydney Property was the (Taxpayer’s) principal place of residence for the Relevant Period do not make it so without appropriate supporting evidence. Having regard to the evidence before me I am not satisfied on the balance of probability that the Sydney Property was the principal place of residence of the (Taxpayer) for any of the relevant tax years.

Orders

The decision under review was affirmed.

Link to decision

Paspaley v Chief Commissioner of State Revenue [2014] NSWCATAD 217

Last updated: 18 May 2016