Case M43

Judges: HP Stevens Ch
CF Fairleigh QC

JR Harrowell M

Court:
No. 1 Board of Review

Judgment date: 15 July 1980.

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J.R. Harrowell (Member)

In this reference the taxpayer, an unmarried mother, claimed a rebate in her 1977 return of $350 under sec. 159K in respect of her son. The Commissioner issued a notice of assessment for the year ended 30 June 1970 accepting that claim but levying an amount of $109.03 for Health Insurance in respect of her son as she had only claimed medical cover as a single person in her return. The taxpayer objected through her registered tax agent who stated under ground 2:

``The taxpayer's dependant... is a non-resident therefore no health insurance cover is required in respect of the taxpayer's dependant under section 251R of the Income Tax Act.''

2. 

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The Commissioner on 2 December 1977 issued an amended notice of assessment deleting the health insurance levy of $109.03 but disallowing the rebate of $350 on the grounds that the taxpayer did not have sole care of the dependant son. The taxpayer objected on the following grounds:

• (1) The taxpayer is a sole parent in accordance with sec. 159K of the Income Tax Assessment Act .
• (2) The taxpayer is a sole parent and has in her care her student child named... (date of birth: 28 March 1962).
• (3) The student child in her care is a non-resident.
• (4) Section 159K does not define the word ``SOLE CARE'' and does not preclude the sole care of a student child residing elsewhere than the taxpayer.
• (5) Section 159K does not prohibit a taxpayer to delegate the sole care of her student child to another person and to pay for such sole care.
• (6) Accordingly, the taxpayer claims that the disallowance of her claim for rebate for being a sole parent was contrary to the provisions of sec. 159 of the Income Tax Act .

3. The objection was disallowed and the matter now comes before this Board.

4. My colleagues in para. 2 to 6 inclusive of their decision have set out the facts which I accept.

5. Although no evidence was adduced in support I accept that the taxpayer has the legal custody of the child. I also accept that the taxpayer contributed to the maintenance of her son within the meaning of sec. 159J so bringing the matter for consideration in terms of sec. 159K. This section requires that the taxpayer ``has the sole care'' of her child during the whole or part only of the year of income. ``Sole care'' in the Concise Oxford Dictionary also means ``exclusive charge''.

6. In this reference the taxpayer's son has lived with his grandparents in Europe since his birth on 28 March 1962. He has never visited Australia. The taxpayer migrated to Australia in 1964 and she was naturalized in 1969. The taxpayer visited her child in her parents' home in Europe in 1969, 1975, 1978 and 1979. No visit was made during the relevant year.

7. During the year ended 30 June 1977 the taxpayer remitted $690 to her mother in Europe. I accept that the money was used to meet the costs of maintaining the son. The amounts were not remitted on a regular basis but only when the taxpayer was in a financial position to do so. For example, the first remittance in that relevant year was $51.50 made on 23 August 1976 the next being $50.60 made in March 1977. When the taxpayer visited Europe to see her son and parents she said she purchased clothing for him and met other costs. The boy's father lived in another European country and the taxpayer last spoke to him in 1969. He has not contributed towards his son's maintenance.

8. In evidence the taxpayer said that her father received some $A15 to 20 per month in child endowment paid by that European government in respect of her child. No evidence was tendered on the child endowment laws of that country or how it was that the father became the recipient of these monthly payments.

9. The son attends a government school at no fee cost to the grandparents.

10. The taxpayer was asked these questions:

``Q. Do you work specific days?

A. Yes usually five days a week, Tuesday to Sunday or Monday.

Q. Do you work Saturdays and Sundays?

A. Yes. I do.

Q. Why did you not bring your son to Australia?

A. Because I cannot afford it financially. They (her parents) look after him.

Q. What would have happened if you had brought him to Australia?

A. I would have had to go to work and then I would not have anybody to look after him, so I prefer to leave him with my parents.''

11. The Board does not have the benefit of any judicial interpretation of the words ``sole care'' as used in sec. 159K. It was argued by the taxpayer's representative that sec. 159K was introduced to assist sole parents, in particular unmarried mothers such as the taxpayer. He contended that -

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``The word `care' does not mean that you have to feed a child. It does not mean that you have to clothe and educate the child. You can purchase all that by delegating care to another person''. He then cited examples such as a wealthy sole parent who sends her son to a boarding school situated perhaps in another State or country; or in the case of her daughter to a Swiss finishing school. In all these examples he would maintain that although she had delegated the care to others she still had the sole care of that child.

12. As a general proposition I accept that view. The High Court in
Geyer v. Downs (1978) 52 A.L.J.R. 142 which adopted the statement of Lord Esher in
Williams v. Eady (1893) 10 T.L.R. 41 at p. 42 ``... it was correctly laid down by the learned Judge, that the schoolmaster was bound to take such care of his boys as a careful father would take of his boys, and there could not be a better definition of the duty of a schoolmaster''. In my opinion this would also be the natural and responsible attitude of a relative or friend with whom the child may stay for a period such as during school holidays. But in all such examples there is the one common element - care has been delegated on a temporary not permanent basis. When the period of delegation ended I would expect the child to return to his or her home under the care of the mother.

13. Section 159K is clearly distinguishable from sec. 159J as the former refers to ``sole care'' whereas the latter section refers to ``contributes to the maintenance of...''. In this case I am in no doubt that to the son ``home'' is where his grandparents live; he had never seen his mother's home, and to his grandparents he would look for sustenance, guidance and help in the daily task of living. The occasional visits of the mother (the taxpayer) were interludes which began with her arrival and ended with her departure and his return to the care of his grandparents. Without doubt the taxpayer contributed to the maintenance of her son and I would accept, notwithstanding the lack of evidence that she had the ultimate control over her son but in the terms of sec. 159K I find that she did not have the sole care of the child.

14. I would uphold the Commissioner's decision on the objection and would confirm the amended assessment.

Claim disallowed