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Cross and Secretary, Department of Housing and Construction [1986] AATA 567 (3 October 1986)

Last Updated: 22 January 2008

ADMINISTRATIVE APPEALS TRIBUNAL

Home Deposit Assistance Act 1982 - date of entry into contractual relations - what were acceptable savings - applicants purchased house from sister - had lived in house as tenants before purchase - savings held in credit corporation account - whether acceptable

Words and Phrases: "Acceptable savings"

Home Deposit Assistance Act 1982 ss 3, 4, 15, 16, 17, 19, 21, 23

 Home Deposit Assistance Amendment Act 1983   ss 4 , 15

Re Stirling and Secretary, Department of Environment, Housing and Community Development (1978) 1 ALD 305 (Decision No. 97)

Re Anderson and Secretary to the Department of Housing and Construction (decided 3 October, 1986)

Klein v Domus Pty. Ltd. [1963] HCA 54; (1963) 109 CLR 467

Secretary to the Department of Housing and Construction v Wildman (1984) 3 AAR 38

Re Smith and Secretary to the Department of Housing and Construction (decided 14 August, 1985 - No. 2283)

DECISIONS & REASONS

Re: JAMES EDWARD CROSS AND

BERNADETTE LOUISE CROSS

And: SECRETARY TO THE DEPARTMENT OF HOUSING

AND CONSTRUCTION

V85/311

AAT Decision No 2911
Tribunal: Mrs. Rosemary Balmford, Senior Member
Place: Melbourne
Date: 3 October, 1986

ADMINISTRATIVE APPEALS TRIBUNAL )

) No. V85/311
GENERAL ADMINISTRATIVE DIVISION )

Re: JAMES EDWARD CROSS

AND: BERNADETTE LOUISE CROSS

Applicants

And: SECRETARY TO THE DEPARTMENT OF HOUSING AND CONSTRUCTION

Respondent

DECISION

Tribunal: Mrs. Rosemary Balmford, Senior Member

Date: 3 October, 1986

The Tribunal affirms the decision under review.

(sgd) Rosemary Balmford

Presiding Member

ADMINISTRATIVE APPEALS TRIBUNAL)

) No. V85/311

GENERAL ADMINISTRATIVE DIVISION )

Re: JAMES EDWARD CROSS

AND BERNADETTE LOUISE CROSS

Applicants

And: SECRETARY TO THE DEPARTMENT OF HOUSING AND CONSTRUCTION

Respondent

REASONS FOR DECISION

1. This is an application under Section 49 of the Home Deposit Assistance Act 1982 ("the Act") for review of a decision made on 7 June, 1985, by a delegate of the Secretary to the Department of Housing and Construction ("the Department") affirming a decision that the maximum amount payable to the applicants under the Act in respect of their purchase of the dwelling known as 1 Scott Street, Mornington, was $2079.
2. The Tribunal had before it the documents lodged by the respondent pursuant to Section 37 Administrative Appeals Tribunal Act 1975 and numbered T1 to T17, together with certain other documents lodged at the hearing, to some of which it will be necessary to refer. Evidence was given at the hearing by the applicant, Mrs. B.L. Cross, who appeared to represent herself and her husband Mr. J.E. Cross, and by her sister, Mrs. L.A. Cross, who is married to the brother of Mr. J.E. Cross. The hearing took place in Frankston.
3. The objects of the Act are set out in Section 3 which reads:

"The objects of this Act are to encourage and assist persons to purchase or build their own homes and to encourage persons to save for the purpose of purchasing or building their own homes, and, in the construction and the administration of this Act, regard shall be had to those objects."

4. What might be termed the operative provisions of the Act are sub-section 16(1) and Section 17, which read:

"16.(1) Where the person, or each person, who is a prescribed person in relation to a dwelling is a person to whom sub-section 15(3) applies in relation to the dwelling, an application for a grant in respect, of the dwelling may be made in accordance with this section.

...

17. Subject to this Act, the Secretary may make, on behalf of the Commonwealth, a grant of moneys in accordance with this Act in respect of a dwelling to the applicant or applicants, as the case may be, for the grant."

5. For their elucidation, sub-section 16(1) and Section 17 require the examination of a number of other provisions. A "'prescribed person' in relation to a dwelling" is defined in sub-section 4(1) as:

"a person who is a prescribed person in relation to that dwelling by virtue. Of sub-section 15(1) other than a person in respect of whom a direction under Section 5 is in force in relation to that dwelling."

Section 5 has no application to the present matter. The relevant parts of sub-section 15(1) are:

"15.(1) Where, on or after 18 March 1982, ... two or more persons (in this section referred to as the 'home acquirers') together have -

(a) entered into a contract for the purchase of a dwelling situated in Australia;

...

then, subject to sub-section (2) ... each of the home acquirers, ... is, for the purpose of this Act, a prescribed person in relation to the dwelling."

6. Sub-section 19(1) of the Act provides:

"19.(1) A grant shall not be made to a sole applicant or to joint applicants unless the Secretary is satisfied that acceptable savings were held by the applicant or by any of the applicants, as the case may be, on the prescribed date and throughout the period of one year ending immediately before the prescribed date."

Section 39 of the Act relates the amount of the grant payable to an applicant to the amount of the applicant's "acceptable savings".

7. Sub-section 4(1) of the Act includes the following definition of "acceptable savings", subject to contrary intention:

"'acceptable savings' means acceptable savings as defined by Section 21."

Section 21 reads:

"21. For the purposes of this Act, the acceptable savings of a sole applicant or of joint applicants on a particular date are the moneys that, by virtue of any of the succeeding provisions of this Division, are included in the acceptable savings of the applicant or applicants on that date."

The relevant succeeding provision of Division 2 of Part III of the Act, in which Section 21 appeared, is Section 23, which reads:

"23.(1) For the purposes of this Act, the acceptable savings of joint applicants on a particular date (in this section referred to as the 'relevant date') include moneys (other than borrowed moneys) -

(a) that were maintained at the expiration of the relevant date by any of the applicants, or jointly by 2 or more of the applicants, on deposit with a branch in Australia of a savings bank, on fixed deposit with a branch in Australia of a trading bank, or on deposit with a building society or credit union;
(b) that were paid on or before the relevant date by any of the applicants, or jointly by 2 or more of the applicants, to a building society as subscriptions in respect of shares in the capital of the society (not being shares listed for quotation for sale or purchase on a Stock Exchange) and were not repaid on or before that date; or
(c) that were paid by any of the applicants, or jointly by 2 or more of the applicants, under the Inscribed Stock Act -

(i) for the purchase of stock that was, at the expiration of the relevant date, inscribed under that Act in the name of that applicant or in the joint names of those applicants, as the case may be; or

(ii) for the purchase of bonds in respect of which an equivalent amount of stock was, at the expiration of the relevant date, inscribed under the Act in the name of a bank."

8. All of the provisions referred to in paragraphs 6 and 7 were repealed by the  Home Deposit Assistance Amendment Act 1983  ("the  Amendment Act ") "in respect of applications in respect of which the prescribed date occurs on or after 1 August, 1983". The amending Act also repealed the words "and to encourage persons to save for the purpose of purchasing or building their own homes" in Section 3.
9. Section 4(1) defines "prescribed date", subject to contrary intent, as:

"'prescribed date', in relation to a sole applicant who has, or joint applicants one of whom has, or 2 or more of whom together have, entered into a contract of a kind referred to in paragraph 15(1)(a) or (b), or commenced the construction of a dwelling as referred to in paragraph 15(1)(c) (whether or not the construction has been completed), means the date that is the date of the contract for the purposes of section 15 or the date on which the construction commenced, as the case may be."

Section 15(6) reads, as far as relevant:

"15.(6) For the purposes of this section, the date of a contract is such date as is determined by the Secretary, being a date -

(a) where paragraph (l)(a) applies - not earlier than the earliest date on which the home acquirer or home acquirers entered into contractual relations with the owner of the dwelling in respect of the purchase of the dwelling;"

10. Mrs. Cross had moneys invested with Custom Credit Corporation Ltd. which did not fall within any of the categories of "acceptable savings" set out in Section 23. In Re Stirling and Secretary, Department of Environment, Housing and Community Development (1978) 1 ALD 305 at 309, the Tribunal, constituted by Mr. Hall, Senior Member (as he then was) said of the corresponding provisions in the Homes Savings Grant Act 1976:

"It is important to note, firstly, that although sub-section 22(1) provides that acceptable savings of joint applicants 'include' certain moneys, that word must be read in the context of section 20, from which it emerges clearly, in my view that the following sections provide an exhaustive definition of the moneys which may be treated as 'acceptable savings' for the purpose of the Act."

11. The conclusion is inescapable that those moneys did not constitute "acceptable savings" for the purposes of the Act, and those moneys were not taken into account. The "acceptable savings" of Mr. and Mrs. Cross, these being accounts held at National Australia and Commonwealth Banks, entitled them, under the unamended legislation, to a maximum grant of $2079. However, if their prescribed date was after 1 August, 1983, then the limitation as to "acceptable savings" would no longer affect them, and they would be entitled to a larger grant.
12. Mrs. Cross said that in 1982 she and her husband were planning to travel around Australia. Mr. Cross was offered a job in Morwell, where he hoped to make a lot of money, but for various reasons this was not a success. In about February, 1983, they returned to Mornington, where Mrs. Cross's family lived. At this stage they owned a car and caravan, in which they had been living in Morwell, but no house.
13. A third sister, Mrs. Quinn, and her husband, were the registered proprietors of the house in Scott Street, which they had bought with financial assistance from Mr. Moore, the father of the three sisters. Mr. Quinn is a jockey, and at the time when Mr. and Mrs. Cross returned to Mornington the Quinn's were living in a house on a horse property which was available to Mr. Quinn in connection with his job. There was some doubt as to whether he would continue in the job. If he left the job the Quinn's would wish to return to live in the house in Scott Street.
14. Mr. and Mrs. Cross moved into the house in Scott Street in February or March, 1983, paying rent, and Mr. Moore suggested that they buy it. He would lend them some money which they could repay in part with the moneys which they would obtain under the Act. In about May, Mr. and Mrs. Quinn decided not to come back to the Scott Street dwelling, and bought another house. So it was generally agreed that the sale to Mr. and Mrs. Cross would go ahead. A letter from the National Australia Bank which was before the Tribunal stated that a bank loan to the applicants was approved on 13 July, 1983, and the mortgage was signed on 16 September, 1983. It is to be assumed that the purchase was completed after that latter date.
15. A local estate agent who was a friend of Mr. Moore prepared a contract of sale in a standard form. The copy of that document, which was before the Tribunal, showed different dates from the copy in Mrs. Cross's file relating to the purchase which was produced to the Tribunal for inspection at the hearing. Both copies appeared to have been altered, and neither was of real assistance in determining the date, partly because of certain ambiguities in the printed text of the form of contract which was employed. It is clear that that document was prepared and executed because it was seen by the agent as a desirable formality.
16. On the evidence before me, I am satisfied that the "earliest date on which [the applicants] entered into contractual relations with the owner of the dwelling in respect of the purchase of the dwelling", in terms of paragraph 15(6)(a) of the Act, was at some time between their return from Morwell and the time in May when Mr. and Mrs. Quinn decided not to come back to Scott Street. For reasons which are set out in my decision in Re Anderson and Secretary to the Department of Housing and Construction (decided on 3 October, 1986) I consider that the expression "earliest date on which the home acquirer or home acquirers entered into contractual relations with the owner of the dwelling in respect of the purchase of the dwelling" is not intended to refer necessarily to the date of an enforceable contract for the purchase of the land, that is to say, a contract which complies with Sections 126 and 127 of the Instruments Act (Vic.) 1958.
17. The ascertainment of the "prescribed date" is a matter within the discretion of the Tribunal, standing as it does in the shoes of the respondent. Dixon CJ, in Klein v Domus Pty. Ltd. [1963] HCA 54; (1963) 109 CLR 467 at 473, said as to the manner in which a discretion should be exercised:

"We have invariably said that wherever the legislature has given a discretion of that kind you must look at. the scope and purpose of the provision and at what is its real object. If it appears that the dominating, actuating reason for the decision is outside the scope of the purpose of the enactment, that vitiates the supposed exercise of the discretion. But within that very general statement of the purpose of the enactment, the real object of the legislature in such cases is to leave scope for the judicial or other officer who is investigating the facts and considering the general purpose of the enactment to give effect to his view of the justice of the case."

18. In Secretary to the Department of Housing and Construction v Wildman (1984) 3. AAR 38 at 41-42, the Full Court of the Federal Court said:

"Counsel for the Respondents stressed the stated objects of the Act and in particular the words 'in the construction and the administration of this Act, regard shall be had to those objects' including the object to encourage and assist persons to purchase their own homes and contended that under sub-section 15(6) the Secretary had a discretion to consider all relevant facts and to determine the date of the contract having. regard to all those facts and the objects of the Act; the only limitation being that the date so determined could not be earlier than the date on which the home acquirer or home acquirers entered into contractual relations with the owner of the dwelling in respect of the purchase of the dwelling. The presence of this restriction, so it was contended, made it clear that the date appearing on any agreement for the purchase of a dwelling should not of itself be decisive of the date of the contract.

In our opinion the contention by counsel for the Respondents is correct. The method of determining by normal legal principles the date of a contract for the sale of land is well known. It would be unusual for the Act to confer upon the Secretary a power to apply that method in the exercise of an ' administrative function. The existence of the limitation on the power contained in sub-section 15(6) suggests that factors other than the normal legal principles to be applied in determining the date of a contract are to be considered and taken into account by the Secretary. The Act is designed to give benefits to persons specified in the objects of the Act and in the subsequent provisions of the Act giving effect to those objects. Regard is to be had to those objects in the construction and the administration of the Act. In having regard to those objects the Secretary must take them into account and give weight to them as a fundamental element in making his determination under sub-section 15(6)."

19. Nevertheless, as Deputy President Jennings said in Re Smith and Secretary to the Department of Housing and Construction, decided on 14 August, 1985, a case arising under the Act:

"It would certainly not be fulfilling the object of 'assisting persons to purchase their own homes' if the choice of a date involving maximum grant was rejected when such a choice was reasonably open.

The only reason for the exercise of the discretion to substitute a date other than the actual date of the contract of sale would be to enlarge eligibility for the benefits of the Act. Now that discretion clearly cannot be exercised without warrant. The Secretary obviously cannot say, for example, that a contract entered into on 17 March 1982 shall be deemed to have been entered into on the following day in order, in effect, to circumvent the will of Parliament that only contracts entered into by purchasers on or after 18 March 1982 shall qualify them to apply for loans under the Act."

That same principle is equally applicable in this case, where the effect of finding a prescribed date on or after 1 August, 1983, would be to increase the amount of the grant available to the applicants.

20. For the reasons given, the decision under review will be affirmed.
21. A question was raised at the hearing as to the effect of certain advice which Mrs. Cross said that she had received from an officer of the respondent's Department. That matter is being investigated by the respondent, and is not a matter within the jurisdiction of the Tribunal in this matter.