Case Q11

Judges: MB Hogan Ch

P Gerber M
GW Beck M

Court:
No. 3 Board of Review

Judgment date: 11 March 1983.

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Dr. P. Gerber (Member)

I have had the advantage of reading the decision of my colleague Dr. Beck, and agree with his summary of the facts and the conclusion he has reached. In the circumstances, I propose to limit myself to some brief observations in relation to the watch repairs.

2. Section 53(1) makes provision for the deductibility of certain repairs. For present purposes, the section reads:

``Expenditure incurred by the taxpayer in the year of income for repairs... to... plant, machinery, implements, utensils, rolling stock, or articles... used by him for the purpose of producing assessable income, or in carrying on a business for that purpose, shall be an allowable deduction.''

The question inevitably arises: where does a lawn mowing contractor's watch fit into this section? It is clearly not machinery or rolling stock; to qualify at all, it must be capable of inclusion in the general expression ``article''. And since anything at all can, on one view, qualify as an article, some limitation must clearly be implied. A lawyer thinks at once to the rule of construction known compendiously as the ejusdem generis rule, to the effect that where there is a particular description of objects sufficient to identify the legislative intent, followed by some ``omnibus'' description, the latter will be confined to objects of the same class or kind as the former;
Cooney v. Covell (1901) N.Z.L.R. 106 at p. 108 . The reference here is clearly to machinery and implements used in the derivation of income. Applied to this case, the taxpayer's lawnmower and the other implements involved in cutting grass are clearly intended to be included in the relief provided for by the section. Why should it include a watch, which has only the most peripheral connection with the grass-cutting process? The result may well be that certain items may, for tax purposes, be depreciated but not repaired. So be it. Section 53 excludes from deduction

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expenditure incurred on repairs, ``not being expenditure of a capital nature''; the only limitation imposed by sec. 54 is that the plant or articles are used for the purpose of producing assessable income. To suggest that ``plant or articles'' must have the same meaning wheresoever they appear in the Act is like saying that the words ``agreement or arrangement'' take their colour from sec. 260. In the circumstances of this case, I am not prepared to dissent from the conclusion reached by my colleagues, but prefer to rest my decision on the narrower ground that a watch, used by a self-employed contractor for pricing his labour, is part of the administrative operation by which his business is controlled.

3. For the above reasons, I join in the decision as set down in para. 5 of Dr. Beck's reasons.