Spiros Theophilas v Chief Commissioner of State Revenue [2015] NSWCATAP 39

Date of judgement 13 March 2015 Proceeding No. AP 14/0329
Judge(s) R L Seiden SC, Principal Member

Dr J G Renwick SC, Senior Member
Court or Tribunal New South Wales Civil and Administrative Tribunal Appeal Panel
Legislation cited Civil and Administrative Tribunal Act 2013

Land Tax Management Act 1956

Road Transport (Driving Licensing) Regulation 2008

Taxation Administration Act 1996
Catchwords ADMINISTRATIVE LAW – Civil and Administrative Tribunal (NSW) – land tax – principal place of residence – no error of law – appeal dismissed
Cases cited Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41; (2009) 239 CLR 27

Aronstan v Chief Commissioner of State Revenue [2008] NSWADT 8

Chief Commissioner of State Revenue v Ferrington [2004] NSWADTAP 4

Collins v Urban [2014] NSWCATAP 17

Ferella v Chief Commissioner of State Revenue [2014] NSWCA 378

Italiano v Carbone [2005] NSWCA 177

Leda Manorstead Pty Ltd v Chief Commissioner of State Revenue [2010] NSWSC 867; (2010) 79 NSWLR 724

Leda Manorstead Pty Ltd v Chief Commissioner of State Revenue [2011] NSWCA 366

Lombard Farms Pty Ltd v Chief Commissioner of State Revenue [2013] NSWADTAP 42

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

Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69

Wilks v Chief Commissioner of State Revenue [2002] NSWADT 248

Background

Counsel S J McMillan and T Russell appeared for Spiros Theophilas, the Appellant. Counsel I Mescher and I Sethi appeared for the Chief Commissioner of State Revenue, the Respondent.

The Appellant sought review of the decision of Senior Member Walker of the NSW Civil and Administrative Tribunal handed down on 16 July 2014.

Professor Walker had disallowed an exemption to land tax under the Land Tax Management Act 1956 (NSW) for the 2013 land tax year. The exemption sought was the principal place of residence exemption with respect to unoccupied land intended to be the owner’s principal place of residence.

In brief, the Appellant owned two properties: 82 St Marks Road, Randwick (“Randwick”) where he lived until September 2012 before moving to his other property at 6 Rodgers Ave, Panania (“Panania”).  He intended demolishing & rebuilding Randwick but the building company went into liquidation preventing his return there.  As at 31 December 2012, the Appellant resided at Panania.

At first instance the Tribunal held that the Appellant’s principal place of residence was Panania; thereby precluding Randwick from land tax exemption.

On appeal, the Appellant contended the Tribunal erred in concluding that Panania was his principal place of residence rather than Randwick.

Decision

The Appeal Panel found no error of law was disclosed in the Appellant’s grounds of appeal. It ultimately held that even though the Appellant’s construction of clause 6(7)(a) of Schedule 1A of the Land Tax Management Act 1956 (“LTMA”) was the correct one, the Tribunal below had found that the Appellant’s principal place of residence, determined objectively, was Panania in any event.

The Appellant raised 9 grounds of appeal, primary among them being:

  1. The Tribunal erred in law in holding that the appellant was entitled to have his use and occupation of Panania taken into account under clause 6(7)(a) of Schedule 1A of the LTMA.

  2. The Tribunal erred in the construction it gave to the said clause 6(7)(a).

  3. The Tribunal erred in holding that “the objective factors … compelled the conclusion that Panania was the Appellant’s principal place of residence at the relevant time”.

  1. The Tribunal erred in law, to the extent it did, in placing reliance on, or applying the decision of the Tribunal in Aronstan v Chief Commissioner of State Revenue [2008] NSWADT 8.

Grounds 1 & 2

The Appellant submitted that the construction adopted by the Tribunal below (and in Aronstan) was too wide and that the exemption is not “simply denied” if there is another property that may be eligible for the principal place of residence exemption. He instead contended that clause 6(7)(a) only precludes an owner from the exemption if the other land in question is “the” principal place of residence of the owner (that is, a land owner will be disentitled to the exemption only if the other land satisfies the definition of principal place of residence in s 3 and clause 2 of Schedule 1A). The Chief Commissioner contended a wider interpretation such that clause 6(7)(a) can be activated even if there is another property that is simply a contender for the exemption under Schedule 1A.

The Respondent contended that so long as there is another property that is a contender for the exemption under Schedule 1A, the unoccupied land is not eligible for the exemption. All that is required is that an owner has a right for his actual use and occupation of other land to be taken into account.

The Appeal Panel accepted the Appellant’s construction of clause 6(7)(a) as correct. The clause 6 concession is denied in the event the land owner uses and occupies another residence he owns, as his principal place of residence. However, despite this conclusion, the Appeal Panel held the Tribunal had objectively determined, through application of specific provisions and facts, that the Panania property was in fact the principal place of residence of the Appellant. Clause 6(7)(a) was thereby engaged to preclude Randwick from being exempt from land tax.

Ground 3

The substance of this ground was whether the Tribunal erred in concluding that the Panania property was the Appellant’s principal place of residence.

The Tribunal had taken into account a variety of factors including the Appellant’s mailing address, the address held on the Electoral Roll Commission records and the fact that the Appellant’s intention to move back to Randwick had not reached fruition by the time of the hearing.  The Appellant submitted that addresses for phone bills and mailing addresses may point to residence but not principal place of residence.

The Tribunal accepted the Appellant’s intention was to reside in the Panania property temporarily, however on the taxing date the Panania property was, objectively, his principal place of residence. The Appeal Panel agreed with the decision of the Tribunal that the test to determine principal place of residence was an objective test. The Appeal Panel was satisfied that the factors, objectively considered, supported an inference that the Panania property was the Appellant’s principal place of residence and therefore, the Tribunal did not err.

Ground 8

The Appellant raised two key issues: whether the Tribunal correctly construed clause 6(7)(a) from Aronstan and whether it was necessary for the Appellant’s stated intention to return to Randwick to come to fruition.

The first part of this submission was dealt with in relation to grounds 1 & 2.

The Tribunal below had cited Aronstan, indicating that it was necessary for the original subjective intention of a person to come to fruition for the intention to be accepted. However, the Tribunal had also noted that, in any event, the intention was not a dominant factor when determining a person’s principal place of residence.

The Appeal Panel decided that the Appellant’s intention was not viewed by the Tribunal below as a requirement necessary to be satisfied in order to determine principal place of residence. The Tribunal below had formed a view as to the Appellant’s principal place of residence objectively after considering the facts brought before it and, as such, there had been no error of law in this regard.

Orders

The Appeal Panel dismissed the appeal.

Link to decision

Spiros Theophilas v Chief Commissioner of State Revenue [2015] NSWCATAP 39

Last updated: 18 May 2016