Lunney v Commissioner of Taxation
100 CLR 4781958 HCA 5
32 ALJR 139
11 ATD 404
[1958] ALR 225
(Judgment by: Dixon CJ)
Between: Lunney
And: Commissioner of Taxation
Judges:
Dixon CJ
McTiernan J
Williams J
Kitto J
Taylor J
Subject References:
Taxation and revenue
Income Tax
Allowable deductions
Fares paid travelling between home and work
Legislative References:
Income Tax and Social Services Contribution Assessment Act 1936 (No 27) - s 51
Judgment date: 11 March 1958
MELBOURNE
Judgment by:
Dixon CJ
These two cases stated raise a question of income tax law which has been accepted as settled for the last two generations. It is whether the fares paid by ordinary people to enable them to go day by day to their regular place of employment or business and back to their homes are deductible expenses allowable against the assessable income earned by the employment or business.
Both in Australia and in England the view has always prevailed that expenses of travelling from home to work or business and back again are not deductible. An explanation of how this came about in England is given by Denning L.J. in Newsom v Robertson. [F1]
The position as it has been understood to be is stated in the work of the late Dr. Hannan, "Principles of Income Taxation" (1946) pp. 306, 433. His statement, no doubt, is brief but really there is nothing substantial to add to it whether by way of reasoning or authority.
Times have changed; the incidence of income tax greatly differs now in scope and weight from its incidence in the days when the law was settled; possibly, the justice of the traditional legal view is a little more open to question and certainly its financial significance supplies a motive for questioning it. Moreover s. 51 (1) of the Income Tax and Social Services Contribution Assessment Act 1936-1956 is not quite in the same terms as the corresponding previous enactments. The Court has explained the differences in Ronpibon Tin N.L. & Tongkah Compound N.L. v Federal Commissioner of Taxation [F2] but the differences are hardly material to the question.
The question having been agitated it became necessary to turn to the Australian authorities by which it was settled long ago. It was surprising to find how few they were and that they depended rather upon their persuasive authority than their imperative character. But the judgment of Judge Murray in Re Adair [F3] was pronounced sixty years ago and the dicta of a'Beckett and Hodges JJ. in the Victorian Supreme Court in Re Income Tax Acts [F4] implied the same view over fifty years ago. These views have remained unquestioned up till this case. The relevant provisions of the English Income Tax Acts are not in the same terms as those of the Australian law, but the whole course of English authority involves a like conclusion. To escape from the course of reasoning on which the decisions proceed requires the taking of refined and rather insubstantial distinctions. I confess for myself, however, that if the matter were to be worked out all over again on bare reason, I should have misgivings about the conclusion. But this is just what I think the Court ought not to do. It is a question of how an undisputed principle applies. Its application was settled by old authority long accepted and always acted upon. If the whole subject is to be ripped up now it is for the legislature and not the Court to do it. I therefore would answer the questions in the special cases that the sums respectively mentioned are not deductible either wholly or in part.