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  4. Green v Commissioner of State Revenue - [2022] QCAT 297

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Green v Commissioner of State Revenue[2022] QCAT 297

Green v Commissioner of State Revenue[2022] QCAT 297

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

CITATION:

Green & Anor v Commissioner of State Revenue [2022] QCAT 297

PARTIES:

Christopher Green

(applicant)

Jennifer Le-Green

(applicant)

v

Commissioner Of State Revenue

(respondent)

APPLICATION NO/S:

GAR290-21

MATTER TYPE:

General administrative review matters

DELIVERED ON:

2 August 2022

HEARING DATE:

11 July 2022

HEARD AT:

Brisbane

DECISION OF:

Member Poteri

ORDERS:

  1. The contract to purchase land dated 9 July 2020 entered into by Christopher Green and Jennifer Le-Green and the building contract dated November 2020 entered into by Christopher Green and Jennifer Le-Green is an “eligible transaction” pursuant to the provisions of Section 5 of the First Home Owner and Other Home Owner Grants Act 2000.
  2. The Commissioner of State Revenue should pay the First Home Owner Grant of $15000 to Christopher Green and Jennifer Le-Green.

CATCHWORDS:

ADMINISTRATIVE LAW – APPLICATION FOR REVIEW IN THE QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL ACT – Where an application for a first home owner grant has been rejected by the Commissioner of State Revenue – Where the Commissioner of State Revenue has rejected the application on the basis that the applicants’ contract arrangement was not an eligible transaction because the Commissioner alleged the contract arrangement formed part of a scheme to circumvent limitations on, or requirements affecting, eligibility or entitlement to a first home owner grant – Where the applicants lodged two applications

First Home Owner Grant and Other Home Owner Grants Act 2000 (Qld), s 5, s 10, s 16 s 69A

First Home Owner Grant Bill 2000 (Qld)

Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 19, s 20

Project Bluesky v Australian Broadcasting Authority (1998) 194 CLR 345

APPEARANCES &

REPRESENTATION:

Applicant:

In person

Respondent:

Mr Walpole, Counsel for the Respondent

REASONS FOR DECISION

  1. [1]
    This matter was heard before me by remote conferencing on 10 July 2022. The facts of the matter are not in contention and the Commissioner of State Revenue (Commissioner) has made certain admissions and concessions.
  2. [2]
    A summary of the facts are:
    1. (a)
      On 9 July 2020, Christopher Green and Jennifer Le-Green (the Greens) entered into a contract to purchase land at Karalee (Land) for the sum of $360,000 (Land Contract). On 8 September 2020, the Greens entered into a building contract (First Building Contract) with Q Coast Homes Pty Ltd trading as Avondale Homes (Builder) for $390,000 to erect a dwelling house (Dwelling House) on the Land. Therefore, there was a total consideration of $750,000 payable by the Greens under the Land Contract and the First Building Contract.
    2. (b)
      On 10 November 2020, the Greens, through the Australian Military Bank Ltd, made an application (First Application) under s 16 of the First Home Owner Grant and Other Home Owner Grant Act 2000 (‘FHOG Act’) to the Commissioner for a first home owner grant of $15,000.
    3. (c)
      On 12 November 2020, the Commissioner rejected this application because the total consideration for the Land Contract and the First Building Contract was not an eligible transaction pursuant to s 5(6) of the FHOG Act. The total consideration for the house and land package was $750,000 which exceeded the threshold of $749,999 set out under s 5(6) of the FHOG Act, albeit by $1.
    4. (d)
      The Greens requested an internal review of the Commissioner’s decision of 12 November 2020 and the Commissioner decided to confirm the decision. There is no issue with regards to this decision. The Commissioner has no discretion to approve grants above the cap set out in the provisions of the FHOG Act.
    5. (e)
      By mutual agreement in late November 2020, the Greens entered into a variation arrangement (Second Building Contract) with the Builder whereby the consideration payable by the Greens to the Builder under the First Building Contract was reduced by $40. This was achieved by removing an item from the First Building Contract.
    6. (f)
      On 7 December 2020, the Greens made a second application (Second Application) pursuant to S 16 of the FHOG Act to the Commissioner for a grant under the FHOG Act. This application attached the Second Building Contract thus bringing the total consideration for the Land and the Dwelling House to $749,960 i.e. under the cap of $750,000 outlined in s 5(6) of the FHOG Act.
    7. (g)
      The Second Application for a grant was refused by the Commissioner and the Commissioner’s decision was internally reviewed by a delegate of the Commissioner. A decision (the Decision) was made by the delegate on 12 March 2021 to confirm the refusal. The central reason given for this refusal was that the Second Building Contract made by the Greens in November 2020 formed part of a scheme to circumvent the limitations on, or requirements affecting the Greens’ eligibility for the grant pursuant s 5(4) of the FHOG Act. That is the Land Contract and the Second Building Contract was not an “eligible transaction” under the FHOG Act.
    8. (h)
      Therefore, the Commissioner is still treating the total consideration of the land contract and the building contract as being $750,000.
  3. [3]
    On 4 May 2021, the Greens filed an application dated 20 April 2021 in the Tribunal to review the Decision.
  4. [4]
    At the hearing the Commissioner’s representatives did not raise any jurisdiction issues. Therefore, I am reviewing the Decision pursuant to ss 19 and 20 of the Civil and Administrative Tribunal Act 2009(QCAT Act). That is, I have all the functions of the of the Commissioner in reviewing the Decision and I must hear and decide the review by way of a fresh hearing on the merits. The purpose of the review is to produce the correct and preferable decision.
  5. [5]
    The Commissioner’s representatives have conceded the following:
    1. (a)
      the conduct of the Greens in their dealings and communications with the Commissioner was at all times honest and the Commissioner is not alleging any deception on the part of the Greens; and
    2. (b)
      except for the operation of s 5(4) of the FHOG Act, the Land Contract and the Second Building Contract is an “eligible transaction” under the provisions of the FHOG Act.
  6. [6]
    Central to the Commissioner’s case is an interpretation of s 5 of the FHOG Act, in particular the operation of s 5(4) of the FHOG Act. I now set out the whole provisions of s 5 of the FHOG Act

5 Meaning of eligible transaction

  1. (1)
    An eligible transaction is—
  1. (a)
    a contract made on or after 1 July 2000 for the purchase of a new home in the State; or
  1. (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 land in the State, to have a new home built on the land, if the contract is made on or after 1 July 2000; or
  1. (c)
    the building of a new home in the State by an owner builder if the building work starts on or after 1 July 2000.
  1. (2)
    Also, each of the following is an eligible transaction—
  1. (a)
    a contract made on or after 1 July 2000 but before 11 October 2012 for the purchase of a home, other than a new home, in the State;
  1. (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 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. (c)
    the building of a home, other than a new home, in the State by an owner builder if the building work starts on or after 1 July 2000 but before 11 October 2012.
  1. (3)
    For subsections (1)(a) and (2)(a), 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—
  1. (a)
    on which a new home or other home is built; or
  1. (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.
  1. (4)
    However, a contract is not an eligible transaction if the commissioner is satisfied it forms part of a scheme to circumvent limitations on, or requirements affecting, eligibility or entitlement to a first home owner grant.
  1. (5)
    Unless satisfied to the contrary, the commissioner must presume the existence of a scheme mentioned in subsection (4) if—
  1. (a)
    for a contract to purchase a new home or other home—the purchaser had an option to purchase the home granted before 1 July 2000 or the vendor had an option to require the purchaser to purchase the home granted before that date; or
  1. (b)
    for a comprehensive home building contract—either party had a right or option granted before 1 July 2000 to require the other to enter into the contract.
  1. (6)
    Also, a transaction is not an eligible transaction if the consideration for the transaction is $750,000 or more.
  1. (7)
    Also, a contract mentioned in subsection (1)(a) or (2)(a) is not an eligible transaction if the total of the following—
  1. (a)
    the unencumbered value of the new home or other home;
  1. (b)
    the unencumbered value of the relevant interest in the land, on which the new home or other home is built or to be built, at the commencement date for the contract;

is $750,000 or more.

  1. (8)
    Also, a contract mentioned in subsection (1)(b) or (2)(b) to have a new home or other home built on land is not an eligible transaction if the total of the following—
  1. (a)
    the consideration for the transaction;
  1. (b)
    the unencumbered value of the land at the commencement date for the contract;

is $750,000 or more.

  1. (9)
    Also, a transaction mentioned in subsection (1)(c) or (2)(c) is not an eligible transaction if the total of the following—
  1. (a)
    the consideration for the transaction;
  1. (b)
    the unencumbered value of the land, on which the new home or other home is to be built, at the commencement date for the transaction;

is $750,000 or more.

  1. [7]
    The Commissioner’s submissions dated 30 July 20221 make reference to the Explanatory Notes of the FHOG Bill 2000. I now set out the Policy Objectives and The Reasons for the Bill:

Policy Objectives

The objectives of the Bill are--

  1. (a)
    To encourage and help home ownership, and to offset the effect of the Goods and Services Tax on home ownership, by implementing a scheme for the payment of grants to first home owners in Queensland.
  1. (b)
    To introduce appropriate administrative and enforcement provisions to facilitate effective administration of the grant.

Reasons for the Bill

The Intergovernmental Agreement on the Reform of Commonwealth-State Financial Arrangements (IGA), to which Queensland is a party, provides for the introduction of a First Home Owner Grant Scheme (FHOGS) from 1 July 2000, to assist affordability for persons building or buying their first home upon the introduction of the Goods and Services Tax (GST). It involves a one-off payment of $7,000 to such persons, and is to be administered by the States and Territories at their own cost.

  1. [8]
    I also set out the commentary on page 12 of the Explanatory Notes regarding clauses 5(4) and (5) the FHOG Bill as follows:

Clause 5(4) and clause 5(5) provide that these contracts will not be an eligible transaction if the commissioner is satisfied that the contract forms part of a scheme to circumvent the requirements of the Act, and set out some of the circumstances where the commissioner will presume that such a scheme exists. These provisions are necessary to prevent abuse of the first home owner grant scheme. Such abuse may occur, for example, if persons enter into arrangements such as options to purchase or build, with the intention of delaying their contract to purchase or build until after 1 July 2000 so that they will qualify for the grant.

  1. [9]
    The Objects of the FHOG Act are set out:

An Act to encourage and help home ownership, and to offset the effect of the GST on home ownership, by establishing a scheme for the payment of grants to first home owners, and to provide for a scheme for the payment of other particular grants to home owners             

APPLICATIONS

  1. [10]
    Pursuant to s 10 of the FHOG Act, a first home owner grant is payable on an application. An application is made pursuant to s 16 of the FHOG Act. I cannot find any provision of the FHOG Act or its regulations which restricts or prohibits an applicant from making more than one application. Therefore, it is my view that there is no legal impediment to an applicant making one, two or even more applications.
  2. [11]
    I note that s 10(3) of the FHOG Act states that only one eligible first home owner grant is payable under the FHOG Act. However, there is no such limitation in s 16 of the FHOG Act regarding the making of an application for a first home owner grant.
  3. [12]
    This issue was never explored or addressed in the Decision letter or in the Commissioner’s submissions. It is apparent that the Commissioner’s delegates did not take this relevant consideration into account when assessing the Second Application.
  4. [13]
    Therefore, there was no legal impediment to the Greens lodging a new application, supported by the Land Contract and the Second Building Contract with the Commissioner on 7 December 2020. The variation to the Second Building Contract was undertaken by agreement and all parties agree that there was no illegality or breach of any laws which prevented the Greens and the Builder from entering into these new arrangements.
  5. [14]
    The Commissioner has conceded that, except for the operation of s 5(4) of the FHOG Act, the Land Contract and the Second Building Contract was part of an “eligible transaction” under the provisions of FHOG Act.
  6. [15]
    Because the Greens are entitled to lodge more than one application, the Commissioner did not need to consider the operation of s 5(4) of the FHOG Act after considering the evidence and material supporting the Second Application.
  7. [16]
    On the material supporting the Second Application it is my view the Land Contract and the Second Building Contract is an “eligible transaction” pursuant to the provisions of s 5 of the FHOG Act and the Commissioner should pay a first home owner grant to the Greens.

SCHEME TO CIRCUMVENT

  1. [17]
    Notwithstanding my finding with regard to the question of lodging more than one application under the FHOG Act, it is my view that the Commissioner has taken a very expansive interpretation of the effect of s 5(4) of the FHOG Act.
  2. [18]
    At the hearing the Commissioner’s representative informed me that there were no decided legal authorities directly on this provision. Further, the FHOG Act does not contain any definitions of the words “scheme” or “circumvent”. Therefore, it is necessary for me to look at the ordinary meaning of these words.
  3. [19]
    The definition of “scheme” as set out in the Macquarie dictionary:

Scheme - Noun

  1. 1.a plan or design to be followed, as for building operations, etc.; a program of action; a project.
  1. 2.a policy or plan officially adopted by a company, business, etc., as for pensions, loans, etc.
  1. 3.an underhand plot; intrigue.
  1. 4.a visionary or impractical project.
  1. 5.a body or system of related doctrines, theories, etc.: a scheme of philosophy.
  1. 6.any system of correlated things, parts, etc., or the manner of its arrangement.
  1. 7.an analytical or tabular statement.
  1. 8.a diagram, map, or the like.
  1. 9.an astrological diagram of the heavens.

–verb (schemed, scheming)

–verb (t) 10. to devise as a scheme; plan; plot; contrive.

–verb (i) 11. to lay schemes; devise plans; plot: *He spoke very bitterly of Dr Stewart … and said he was scheming to get the Australians as colonists for his own land. –MICHAEL WILDING, 1985.

–phrase 12. in the (total or whole or grand) scheme of things, in the context of a broad view of what matters.

–schemer, noun

  1. [20]
    The definition of “circumvent” as set out in the Macquarie dictionary:

Circumvent - verb

  1. 1.to get around or avoid: *unions will strongly oppose any move to dismantle or circumvent the award system. –NEWS, 1990.
  1. 2.to surround or encompass as by stratagem; entrap.
  1. 3.to gain advantage over by artfulness or deception; outwit; overreach.
  1. 4.to go round: *He had instead to circumvent the globe following the route taken 115 years ago –ADVERTISER, 1990.

–circumventer, circumventor, noun

–circumvention, noun

–circumventive, adjective

  1. [21]
    The other dictionaries that I perused contain similar definitions of the words “scheme” and “circumvent” to those contained in the Macquarie dictionary.
  2. [22]
    The Commissioner’s submissions and the Decision letter do not provide any assistance or commentary on the definitions of the words “scheme” or “circumvent” per se. The submissions say that to determine whether the variation (i.e. Second Building Contract) forms a “scheme to circumvent limitations on, or requirements affecting, eligibility or entitlement to [Grant]” requires an assessment of all the relevant facts. The submissions go on to say that the Explanatory Notes for the FHOG Bill indicates that an example of such a scheme is the entering into of options with the intention of delaying a contract to purchase or build until after 1 July 2000 so as to qualify for the grant. The submissions go on to say that there is very little to distinguish this example from the facts of this matter. It is my view that the facts of this matter can be distinguished from the example in the Explanatory Notes.
  3. [23]
    The use of options is specifically prohibited pursuant to s 5(5) of the FHOG Act. This is understandable because the use of an option gives one party the right to choose or not choose whether to exercise the option. Further, the language used in the Explanatory Notes connects the use of options with some sort of wrongdoing. That is delaying a contract to purchase until after the scheme commences.
  4. [24]
    Section 69A of the FHOG Act outlines certain disqualifying arrangements when “related persons” are involved. “Related persons” are defined in the provision and in summary they are close relatives of the applicant or a spouse. Depending on the facts of each individual case, it is probable that the “disqualifying arrangements” in s 69A of the FHOG Act would also be a “scheme” to “circumvent” pursuant to s 5(4) of the FHOG Act.
  5. [25]
    There is no other example of a “scheme” to “circumvent” quoted in the Explanatory Notes.

POLICY OBJECTIVES

  1. [26]
    Because the provisions of s 5(4) of the FHOG Act are not absolutely clear in regard to the meaning and scope of “scheme to circumvent”, it is necessary to look to other sources, such as the Explanatory Notes and the objects,for clarification.
  2. [27]
    The leading authority of Project Bluesky v Australian Broadcasting Authority Limited and Ors (1998) 194 CLR 355 (Project Bluesky) is relevant in considering the objects of legislation together with individual provisions of such legislation. At page 381 the Court held:

The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The meaning of the provision must be determined “by reference to the language of the instrument viewed as a whole”…

A legislative instrument must be construed on the prima facie basis that its provisions are intended to give effect to harmonious goals.

  1. [28]
    The policy objectives of the FHOG Bill and the FHOG Act are set out in the Explanatory Notes and the Objects of the FHOG Act. The principal objectives are “to encourage and help home ownership….by establishing a scheme for the payment of grants to first home owners”.
  2. [29]
    I also note the use the phrase “these provisions are necessary to prevent abuse of the first home owner grant scheme” on page 12 of the Explanatory Notes. This supports my view that the provisions of s 5(4) of the FHOG Act only operate when there is some sort of illegality, abuse, wrongdoing or deception in the actions of an applicant.
  3. [30]
    I am of the opinion that the type of scheme to circumvent that would apply to s 5(4) of the FHOG Act would, for example, be the use of a blind trust where the actual buyer is not a first home owner or where the parties enter into secret arrangements where part of the consideration for the purchase of the land or to build a home is paid in cash to circumvent the $749,999 cap for the FHOG scheme.
  4. [31]
    This view is supported by the extensive powers of the Commissioner to enforce, investigate, enter premises, appoint authorised officers, impose penalties and other similar provisions in the FHOG Act.
  5. [32]
    At the hearing the Commissioner’s representatives directed me to the undated Response filed in the Tribunal on 26 June 2021. At the hearing the Commissioner’s representatives submitted that this was an admission by the Greens and proof that this was a scheme to circumvent the limitations on, or requirements affecting, eligibility or entitlement to first home owner grant. This response does not add any real facts or circumstances to those that are contained in the Decision letter and the Commissioner’s submissions. The Greens’ response filed on 26 June 2021 supports this conclusion.
  6. [33]
    The actions of the Greens show no hint of “deception” or “abuse of the process”. The making of another application is not prohibited under the provisions of the FHOG Act and their actions are squarely aimed at complying with the relevant laws and policies of the FHOG scheme.
  7. [34]
    A “scheme” to “circumvent” referred to in s 5(4) of the FHOG Act should be restricted to actions or circumstances that involve “deception”, “fraud”, “trickery”, “abuse of process” or something similar.
  8. [35]
    Using the law outlined in Project Blue Sky and the primary objects of the FHOG Act, it is my view that the Parliament intended the FHOG scheme to assist individuals such as the Greens. I do not believe Parliament intended the provisions of s 5(4) of the FHOG Act to extend to apply to the facts and circumstances that currently confront the Greens. They are ordinary people whose actions were intended to comply with the requirements of the FHOG Act to assist them in the purchase of land and the erection of their first home. At the hearing the Greens advised the Tribunal that they had limited resources and were relying on this grant of $15,000. In fact, Mrs Le-Green was heard to be very upset during the hearing.

FINDINGS

  1. [36]
    I am satisfied that the Building Contract and the Second Building Contract supporting the Second Application is an “eligible transaction” as defined in s 5 of the FHOG Act.
  2. [37]
    Notwithstanding the finding above, I am satisfied that the Land Contract, First Building Contract and the Second Building Contract are not part of a scheme as defined in s 5(4) of the FHOG Act to circumvent limitations on, or requirements, affecting, eligibility or entitlement to the first home owner grant.
  3. [38]
    Accordingly, the correct and preferable decision is for the Commissioner to pay the first home owner grant to the Greens.

ORDERS

  1. The contract to purchase land dated 9 July 2020 by Christopher Green and Jennifer Le-Green and the building contract dated November 2020 entered into by Christopher Green and Jennifer Le-Green is an “eligible transaction” pursuant to the provisions of Section 5 of the First Home Owner and Other Home Owner Grants Act 2000.
  2. The Commissioner of State Revenue should pay the First Home Owner Grant of $15,000 to Christopher Green and Jennifer Le-Green.
Close

Editorial Notes

  • Published Case Name:

    Green & Anor v Commissioner of State Revenue

  • Shortened Case Name:

    Green v Commissioner of State Revenue

  • MNC:

    [2022] QCAT 297

  • Court:

    QCAT

  • Judge(s):

    Member Poteri

  • Date:

    02 Aug 2022

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

Cases Cited

Case NameFull CitationFrequency
Project Blue Sky v Australian Broadcasting Authority (1998) 194 C.L.R 355
1 citation
Jump To
Cite 1 - (1998) 194 C.L.R 355
Project Bluesky v Australian Broadcasting Authority (1998) 194 CLR 345
1 citation
Jump To
Cite 1 - (1998) 194 CLR 345

Cases Citing

Case NameFull CitationFrequency
Francis v Commissioner of State Revenue [2023] QCAT 4641 citation
1

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