Case M50

Judges: MB Hogan Ch

P Gerber M
GW Beck M

Court:
No. 3 Board of Review

Judgment date: 30 July 1980.

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Dr. P. Gerber (Member)

My colleague, Dr. Beck, has already set out the relevant facts. It would be otiose to repeat them.

2. Whether a taxpayer is, or is not carrying on a business is often a vexed and borderline question, the more so when the alleged business involves the business of primary production: see generally the cases cited by Bowen C.J. and Franki J. in
Ferguson v. F.C. of T. 79 ATC 4261 . In this reference, however, the case clearly falls on the wrong side of the border. In the years under review, the few improvements made were limited to an area of approximately two acres, which, for good measure, was subsequently subdivided and converted into a homestead block, the taxpayer selling a moiety of his interest in this block to his wife. The only improvements made and claimed as a deduction under the appropriate heads, were limited to this small homestead block and consisted of the planting of a few experimental trees, tended at weekends and holidays. There was certainly no evidence of ``CROP ESTABLISHMENT: 1.2 ha tomato plants and 0.4 ha Banana 75 corms'' as stated in the objection.

3. This finding of fact can lead to only one conclusion - there is here a total lack of commercial expectation that the produce ``would have a ready market and would yield, if the trees became established, a financial return which would be of a significant amount, with a relatively small outlay of time and money...'', which was held to be the determinative factor in favour of the taxpayer in Thomas' case (72 ATC

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ATC 351

4094). Likewise, there is no evidence ``of considerable system and organisation'' which enabled the taxpayer to succeed in Ferguson v. F.C. of T. (supra at p. 4265).

4. Whilst there was some confusion in the evidence on dates and the size of taxpayer's holding, I have no doubt that this confusion was solely attributable to the effluxion of time and the discomfiture engendered in this taxpayer in translating traditional acreage into the lingua franca of hectares, requiring a bilingual skill, the lack of which is shared by many others.

5. For the above reasons, I would confirm the Commissioner's decision on the objection.