Case A43

Members: JL Burke Ch

RC Smith M
RE O'Neill M

Tribunal:
No. 1 Board of Review

Decision date: 7 August 1969.

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R.C. Smith Q.C. (Member): The facts in this reference are set out in the reasons of my colleague, Mr. O'Neill, and I do not repeat them. He has fully discussed the relevant cases and I am in general agreement with the conclusion at which he has arrived.

2. I would add that the decision of Taylor J. in
Quarries Ltd. v. Federal Commissioner of Taxation (1961) 106 C.L.R. 310 where his Honour held that certain portable sleeping units constituted ``plant or articles'' within the meaning of sec. 54 of the Assessment Act (the relevant section here) and that they were used for the purpose of producing assessable income is a strong authority in favour of the present taxpayer's claim.

3. In that case it was put in argument on behalf of the Commissioner that the sleeping units were not plant because they had no place in the productive process itself but constituted part of the setting in which the business was carried on. This submission was rejected by his Honour on the facts before him.

4. At p. 312 of his judgment, when dealing with the meaning of ``plant'', his Honour said ``... it is obvious that some reference must be made to the nature of the taxpayer's business and the purpose which the so-called sleeping units served.'' Later, at p. 317, when discussing the use to which the sleeping units were put, he said - ``The critical question is concerned with the purpose for which they were used by the taxpayer.''

5. Just as the sleeping units in that case were used on the site of the operations carried on by Quarries Ltd., so here the various sheds were situated on the several sites where the taxpayer was carrying out its contracts and were essential to the performance of such contracts. From their nature their operation may appear to have been a passive one but they were much more than just ``setting'' in which the operations were carried on. They did, indeed, play an important part in the productive processes of the taxpayer on the respective sites on which they were situated, since without them it would not have been practicable for the taxpayer to carry out the operations necessary for the performance of its contracts.

6. I would allow the taxpayer's claim.