Case F23
Judges:JL Burke Ch
RE O'Neill M
CF Fairleigh QC
Court:
No. 1 Board of Review
J.L. Burke (Chairman); R.E. O'Neill and C.F. Fairleigh, Q.C., (Members): The taxpayer, who is now 35 years of age, suffered subcutaneous naevi of the face at birth, and her face became very badly swollen. Her father, a medical practitioner, and her mother were then living in London, and a few months after the birth of their daughter (the taxpayer) they engaged a radiologist who is described in evidence as being one of the world's foremost in that field. He used radium to reduce the swelling, and unfortunately this resulted in burning a ``huge patch'' of skin on the right side of her head. Thereupon Sir Harold Gillies, ``the famous plastic surgeon'', was engaged and he carried out a series of skin grafts and a succession of operations over a period until the taxpayer was about six years of age. He took the hair from the back of her head and swivelled it around to the front so that she could have hair in the front growing there normally. This left a bald patch at the back of her head the size of, or perhaps somewhat larger than, a man's hand. The surgeon built up a complete eyebrow by putting a false piece of bone under it. The taxpayer's face remains marred (to repeat her mother's description) and the sight of one eye is defective.
2. The Commissioner adjusted the taxable income as returned for the year ended 30 June 1971 by disallowing a deduction for two items shown in the return as ``(Supplier's name) - Sydney, Surgical Hair Piece $90'' and ``(Supplier's name) - Sydney, Surgical Wig $54'' equals $144. The accountants for the taxpayer duly lodged an objection on the ground that that sum was an allowable deduction under sec. 82F(3)(f) of the Income Tax Assessment Act and the notice of objection sets out -
- (i) The wigs claimed were originally prescribed by a medical practitioner.
- (ii) The wearing of such partial wigs arises from an operation when the taxpayer was a child and they are not worn for cosmetic purposes.
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3. The Commissioner disallowed the objection, and in a letter bearing date 18 October 1972 he informed the taxpayer that decisions by Boards of Review, in similar cases, have established principles which have been applied in the instant case in determining that neither the hair piece nor the wig could be classified as a medical or surgical appliance. The taxpayer duly requested that the decision on the objection be referred to a Board of Review. It is not disputed that the taxpayer was allowed deductions against assessable income for the cost of the hair pieces until some two or three years prior to the subject year.
4. Evidence was given by the taxpayer's mother as well as the taxpayer, as the latter was obviously unable to recount the earlier history. Under cross-examination the taxpayer's mother said that Sir Harold Gillies simply said to get a hair piece made for the child and it was made; it was necessary to buy hair to match the child's hair and have it made up; the hair piece was human hair. The Commissioner's representative then asked the taxpayer's mother whether in recommending that the parents purchase the hair piece initially, Sir Harold Gillies gave any reason why it would be necessary. This elicited the reply: ``If you do not mind my saying so, I would feel rather stupid in saying to Sir Harold Gillies why should I purchase a hair piece when it is an obvious thing. Do you expect a girl to go around showing a bald patch.'' The taxpayer's mother assented to the proposition that Sir Harold Gillies also recommended purchase of the wig due to the difficulty of showing a normal appearance. However it became apparent in subsequent evidence that the witness was not then adverting to the distinction between the wig, which was an ``ordinary commercial wig'' obtainable and worn as a matter of fashion by many women, and the hair piece.
5. The first occasion on which the taxpayer had obtained a wig (as distinct from a hair piece) was the one referred to in the subject income tax return as ``(Supplier's name) - Sydney, Surgical Wig $54''. Prior thereto the taxpayer (from childhood) had worn hair pieces (replaced in later times every two or three years) which were hand made of human hair, each hair being put in separately. The hair piece was affixed to the head with spirit gum. It became increasingly difficult and more and more expensive to obtain the hair piece, and there was an ever recurring problem of cleaning it. The evidence is that there may be only one person left in Sydney today making these hair pieces.
6. Sometimes the taxpayer in summer wears the hair piece only, because the wig is too hot; sometimes she will leave the hair piece on and put the wig on over it, for personal reasons which she mentioned in evidence. Her mother stated that the taxpayer has to wear something (i.e., the wig or hair piece) all the time. More recently than the subject income tax year the taxpayer has been wearing a different type of wig (again presumably an ordinary commercial wig) which is put on with hair pins. The hair piece is not left on for more than a week (sometimes only three or four days) because of the taxpayer's need to wash her hair and usually she has to attend upon a hairdresser to affix it because of the problem of securing it in the right position. New linings have to be sewed onto the hair piece every two or three months and as this is said to be very expensive it is done by the taxpayer's mother.
7. The Commissioner's representative acknowledged that the hair piece may have been recommended by a doctor (scil. legally qualified medical practitioner) to save the taxpayer embarrassment, and concedes that the subsection would not necessitate a special application to the medical practitioner on each occasion that a new hair piece was needed, but contends that the recommendation does not fulfil the requirements of being prescribed. It was further contended that neither a wig nor a hair piece could ever be a medical or surgical appliance within the meaning of sec. 82F(3)(f) of the Income Tax Assessment Act. The operation initially to remove the hair from the back of the head and replace it on the forehead was accepted as being a surgical operation, but it was submitted that the use of the hair piece to cover the bare patch at the rear of the head was solely for cosmetic reasons and performed no medical or surgical function in itself and it was
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contended that it was only to enhance the taxpayer's appearance.8. The taxpayer's mother said that the hair piece had never been entirely successful in covering the bald patch as the gum caused the hair piece to shrink in size and it was only recently that wigs became available on the market with a change of fashion whereby women wear wigs for appearance. The wig (unlike the hair piece) had no need to match the taxpayer's hair. As a matter of plain common sense, it was submitted, the taxpayer could not go out in the street without wearing the wig (perhaps alternatively the hair piece) on a cold windy day without a grave risk of catching pneumonia.
9. Section 82F(3)(f) does not in express words or implicitly require that a prescription be written out and a recommendation may be sufficient, dependent on the evidence. In the present case it is clear that Sir Harold Gillies was giving a considered opinion that the taxpayer should wear a hair piece or wig of some kind and there is no reason whatever for restricting his advice to a need for a mere cosmetic improvement. It would be impractical in some instances to require that the medical practitioner should do more than indicate in a general way the type of medical or surgical appliance that is prescribed, i.e., recommended, by him. Furthermore the recommendation of a surgical or medical appliance may be reasonably understood in some circumstances to include future modifications of or substitutes for the thing as originally prescribed, regardless of whether the thing is ultimately available in stores although originally it had to be especially designed and manufactured on order. Thus the prescribing of a wheel chair at a time when the only means of locomotion is by the occupant manually turning wheels which are geared to the drive wheels, would cover future developments such as the electric chair which perhaps may then be a fad with golfers, shoppers and others. The limitations to the extension by implication of the thing prescribed will fall for determination on the factual situation.
10. A summary of the reported decisions on the present subject is as follows. In September 1967 (
18 T.B.R.D. 23 Case T23) No. 3 Board of Review unanimously disallowed a claim for the cost of a hair piece which had been recommended by a physician. The taxpayer in that case had radical surgery to his scalp in respect of a melanoma; skin from his leg was grafted over the wound; hair would not grow over the graft and the physician advised the taxpayer to wear a hair piece to protect the graft from dangerous knocks and strong sunlight to minimize the re-occurrence of cancer. The taxpayer purchased a normal hair piece from a wig maker. In disallowing the taxpayer's claim for a deduction pursuant to sec. 82F(3)(f) the Board held that to answer the description of a medical or surgical appliance, an appliance must be manufactured or distributed or generally recognised as an article intended to achieve a medical or surgical end. The Board said that the hair piece in the instant case was of the normal cosmetic type and its character did not alter by having been recommended by a physician or by having been purchased for medical reasons. In para. 9 of his reasons Mr. McCaffrey said that there was no doubt that it was important for that taxpayer to protect his scalp from injury and from an appearance angle to wear a toupee and further said that the toupee does not of itself have any medical or surgical value.
11. In October 1971 (Case C61,
71 ATC 272) No. 2 Board of Review unanimously disallowed a claim for the cost of a wig which had been recommended by a physician. The taxpayer in that case had suffered from childhood from baldness (alopecia totalis). He acquired a made-to-measure wig which he wore at all times, except when sleeping; use of a wig enabled him to mix more freely socially; new wigs were purchased at intervals of about two years and deductions were allowed for the cost in all instances except the last two; the baldness was a source of embarrassment to the taxpayer and caused him to withdraw from society and the wearing of the wig alleviated this condition. The supplier of that wig was described on the invoice as ``Ladies Hairdressers, Street and Theatrical Wigmakers and Hair Specialists'' and it was the practice of the supplier to make that taxpayer's wigs to his scalp measurements, the hair being knotted to a
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base fitted with elastic grips at the sides and metal inserts to make it sit properly; as far as practicable the hair colour of the wigs remained unaltered but the coiffure changed from time to time.12. In para. 6 of its reasons No. 2 Board said wigs are generally used for cosmetic purposes and are manufactured, sold and recognised as being worn for those purposes; such wigs cannot on any tenable view be regarded as medical or surgical appliances; there was little to distinguish that taxpayer's wig from the generality of such articles; it was made to that taxpayer's own measurements and, because he was bald, the base was smaller than otherwise would be the case and the method of gripping the scalp was different from the method used in wigs worn by people with natural hair. However No. 2 Board said that those were differences of detail and not of essence, and that that taxpayer's wig appeared indistinguishable in nature and character from those usually worn; and further that wigs in general and that taxpayer's in particular could not be described as medical or surgical appliances.
13. A further case came before No. 2 Board of Review in April 1973 (Case E8,
73 ATC 55). That taxpayer's daughter suffered from a disease (monilethrix) which caused her hair to snap at about the level of the scalp, resulting in an appearance of baldness. A skin specialist advised that there was no known cure and gave a certificate that ``she must wear a wig for medical and psychological reasons''. The wig was unlike wigs used for decorative and fashion purposes to the extent that it was held in place by a combination of flat steel springs and elastic and was made of human hair; it was replaced on three occasions as a result of the child's physical growth and general wear and tear; prior to that reference the Commissioner had allowed three claims for deductions in respect of these wigs. The Board by majority disallowed the appeal and confirmed the assessment. In his reasons for dissenting, Mr. Todd (Member) referred to the evidence of the medical practitioner that the important thing was for the girl to grow up as a normal child and she could not do that unless she wore a wig; otherwise the child ran the risk of being ``psychologically crippled''. The only issue in that case on the reasoning of Mr. Todd was whether the wig could be described as a ``medical appliance'' within the meaning of those words in sec. 82F(3)(f) of the Income Tax Assessment Act and he concluded after careful reflection that the unanimous decision of No. 2 Board in Case C61, 71 ATC 272 was wrong.
14. In his reasons for dissenting, Mr. Todd said that on reconsideration it seemed to him that the requirement that the appliance be prescribed may do no more than ensure that an appliance is not acquired unnecessarily, and he did not think that the requirement that the appliance be prescribed denies that an appliance may be a medical appliance in some circumstances and not in others. Thus Mr. Todd rejected the proposition that ``it is not sufficient for a taxpayer to show that a physician has prescribed an appliance to be used for medical or surgical ends'', and also the proposition that the appliance be one ``which is manufactured as or distributed as or generally recognised to be an article or thing intended to achieve a medical or surgical end''.
15. In August 1973 the question was again considered by No. 2 Board of Review (Case E8, 73 ATC 55). That taxpayer's wife suffered from an irreversible pathological condition of the scalp (alopecia capitis and psoriasis of the scalp) which was aggravated by emotional stress. It was considered to be necessary to protect her scalp from direct sunlight and a wig was worn in accordance with medical advice; its use had the effect of preventing extreme embarrassment and psychological stress which she would otherwise have experienced in company, and thus, by avoiding such stress, prevented worsening of the condition. The wig had no therapeutic quality in relation to the alopecia, but alleviated a chronic anxiety state which would otherwise aggravate psoriasis. The maker of the wig had described it in evidence as being unlike normal cosmetic wigs in that it was constructed of human hair to the individual measurements of the patient; undue pressure which would cause pain or discomfort had to be avoided, and it was held in position by a system of metal springs. The maker stated that in the trade wigs
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possessing such characteristics were referred to as ``medical'' wigs, but literature in evidence did not contain such a description. The Board by a majority disallowed the appeal and confirmed the assessment. The sole question was whether the wig was a medical appliance for the purpose of para. (f) of the definition of ``medical expenses'' as in sec. 82F(3) of the Income Tax Assessment Act 1936-1971.16. The majority of the Board considered that the facts did not differ in material respects from those in Case E8, 73 ATC 55 and adhered to the view that the phrase ``prescribed by a legally qualified medical practitioner'' carried the notion of an appliance prescribed by a physician or surgeon in relation to the health of his patient, that is, prescribed for medical or surgical reasons.
17. For the reasons given by him in Case E8, 73 ATC 55 Mr. Todd was of the opinion that the taxpayer was entitled to succeed as the wig in question objectively regarded was seen to be a medical appliance.
18. With all due respect to those who see the matter differently, the reasoning which impelled Mr. Todd to differ from the other members of No. 2 Board is highly persuasive; and again, with respect, his reasoning is in accord with the present day tendency of both the medical profession and the Courts to consider psychological treatment (as in damage claims arising from traffic incidents and industrial accidents) to be of major importance in restoring an injured person to a useful status in the community, and this shows the need to reconsider the question (as one of the matters here in issue) whether it is necessary that the wig be essentially different from the decorative wig marketed in stores.
19. Notwithstanding expressions to the contrary effect in earlier cases, it is considered that a wig can of itself have surgical or medical significance, and that it is not valid to draw a distinction between an article or thing ``to be used for'' medical or surgical ends, and an article or thing ``intended to achieve'' medical or surgical ends. If it is practicable for the legally qualified medical practitioner to prescribe for medical or surgical ends something which might not ordinarily be recognised as being a thing intended to be employed for medical or surgical ends, the ``ordinary'' character of the article alone does not cause it to be outside the scope of sec. 82F(3)(f).
20. The hair piece is literally an ``appliance'' in the sense that it is applied to and attached to the head. In a less direct but none the less appropriate sense the wig is also an ``appliance''.
21. On the evidence in the present case the hair piece was prescribed and the function of the wig is such that it may reasonably be considered as an adaptation or modification of what was originally prescribed, i.e., recommended, by Sir Harold Gillies as part of the post-operative surgical treatment carried out by him. The hair piece and the wig in the instant case are ``medical or surgical'' appliances prescribed by a legally qualified medical practitioner, and the payments therefore are ``medical expenses'' within the meaning of sec. 82F(3)(f) of the Income Tax Assessment Act 1936-1971.
22. For the reasons the claims made by the taxpayer are allowed and the assessment is to be amended accordingly.
Claims allowed
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