Case S82
Judges: HP Stevens ChTJ McCarthy M
PM Roach M
Court:
No. 1 Board of Review
P.M. Roach (Member)
The taxpayer in this reference is a highly qualified nursing sister who was employed throughout the year of income ended 30 June 1980 in the service of the Health Commission of her State on air ambulance duties as a flight sister. In her return of income for that year she claimed deductions (inter alia) in relation to motor vehicle expenses said to have been incurred as a flight nurse ($979); and a further $130 described as ``watch replaced''. Both claims were disallowed ``as private expenditure''. Her then tax agent made objection in writing on her behalf. In its material parts the objection said:
``Objection is raised against the above assessment. The claim for motor vehicle expenses and the replacement of watch should not have been disallowed. Taxpayer is a nurse with a flying medical emergency service and is on call at all times and the expenses are essential in her occupation.''
2. The evidence before the Board established the facts mentioned hereafter. The taxpayer resided 14 km from the international airport from which the air ambulance service operated. She was one of 12 nurses operating from that base who shared a continuous roster which provided for the staffing of both routine and emergency air-ambulance operations and also incidental matters.
3. The roster provided for routine ambulance services on the basis of two day-time shifts six days per week. They overlapped in time. For convenience I shall refer to them as the ``morning'' and ``afternoon'' shifts. Sisters rostered to serve on a morning shift could check with base the previous evening to learn whether the morning flight would be operating next day. Only rarely was the morning flight not to operate. In relation to the afternoon shift, nurses checked with base 1 ½ hours before the shift was to commence to ascertain whether or not the routine flight was to operate. Usually the scheduled flight would operate but occasionally, somewhat more often than with the morning flight, it did not operate. On such occasions nurses could be required to attend the airport even though no flight was then proposed. If required to attend they were obliged to be in attendance at the airport base at the commencement of their appointed shift and they were obliged to remain on duty until the termination of that shift or such earlier time as they might be released from the obligation to remain in attendance. When a regular morning or afternoon flight was not to operate, permission could be given relieving the rostered nurse from the obligation to attend at the base at the commencement of her shift subject to the conditions that she would be obliged to present herself at the base during her shift if called on; and that she held herself available so that she could be contacted by telephone. Although I shall speak hereafter as if in such circumstances she remained at her home, she was not obliged to remain at that particular place but was at liberty to be at any other place provided she could be contacted by telephone and provided that while in transit between one place and another she could be contacted by ``beeper''. If called upon she would be required to present promptly at the airport base. Whether required to attend there or not she would be remunerated for all the hours of the rostered shift as if she had attended at the airport throughout the shift.
4. The roster also provided for an emergency service which could be brought into operation 24 hours a day 365-366 days per annum. On this rostering cycle nurses were rostered to three shifts covering the 24 hours in each day. Throughout the rostered period the nurse was obliged to keep herself available to respond if called on and ready to serve. Whether called on or not, she was entitled to be remunerated for each hour of rostered duty as if she had been called on and had served at or from the airport base throughout the shift.
5. The third element of rostered duty was a shift from 8 a.m. to 4 p.m. appointed approximately on a weekly basis in which staff were principally directed to carry out
ATC 610
maintenance duties at the airport. While on that shift (``the maintenance shift'') they could be called on to carry out flying duties. This duty required that the nurse present herself at the base at the commencement of her shift.6. In all cases it was possible that the taxpayer would be called on to work overtime in which case she would be remunerated accordingly. It was also possible that if she arrived at the airport before the hour appointed by the roster for the commencement of her shift, she might be required to commence work immediately with the result that she would be entitled to overtime. She could also qualify for overtime if she responded to a call-back at times when she had no obligation to keep herself available on call.
7. On the basis of the foregoing a number of cases can be distinguished. The first embraces travel between home and airport outside rostered hours in order to present for duty at the appointed hour for a routine shift or maintenance shift. That case is indistinguishable in principle from that of the employee whose claim to travelling expenses to and from work was considered and unanimously rejected by the Full Bench of the High Court of Australia in
Lunney
v.
F.C. of T.
(1957-1958) 100 C.L.R. 478
.
8. The second case covers the situation in which the taxpayer was relieved of the obligation to present herself at the airport base at the appointed hour for commencement of a routine shift but permitted by her employer to remain at home throughout the shift subject only to the obligation to be contactable and to be ready to present herself promptly for duty at the airport base if called on. If called on, she incurred expense in travelling to the airport base. The essential difference between this case and the preceding case is that, if called on, the taxpayer would be incurring travelling expenses during a period of time in respect of which she was being remunerated. (Whether she continued to earn her income while travelling on the return journey would of course depend upon whether or not she was given leave to absent herself from the base before the expiration of the appointed hours of her shift or not.)
9. The next cases relate to the 24-hour emergency roster. A nurse appointed to one of the shifts on that roster had an obligation to contact the base by telephone 1 ½ hours before the scheduled commencement of her shift so that if required she could present herself at the airport at the appointed hour for the commencement of the shift. Having made that contact and established that she was not so required, she was then entitled to remain at ``home'' but within contact until such time as she was called out (if at all). During the appointed hours of her shift she would be remunerated for each hour and the rate of remuneration would not change according to whether she was at home; in transit between home and the base; at the base; or on flying duties. The result of that arrangement was that if, on phoning in, she was told that she was required to present for duty at the hour appointed for the commencement of her shift (``the third case''), then her travelling to work would have been indistinguishable from the first case. (Whether or not her return journey would have been during periods for which she was being remunerated would have depended upon whether or not she was relieved from attendance at the base prior to the termination of her shift.) On the other hand, if she was not called out until her shift had commenced (``the fourth case'') she would be travelling during shift hours for which she was being remunerated. (Whether her earnings were continuing as she returned would depend upon whether the return journey only commenced after the expiration of her shift or not.)
10. Subject to one consideration yet to be mentioned I have no hesitation in holding that the circumstances of this taxpayer in all cases were indistinguishable in principle from those of Lunney ante, both when travelling to and travelling from work.
11. In Lunney's case Williams, Kitto and Taylor JJ. in their joint judgment applied the ``essential character'' yardstick to determine whether travelling expenses by an employee to his place of employment were or were not expenses of a private nature. Their Honours held that they were private. In my view they would have remained private in character even if the employer had authorised the employee to commence and conclude his appointed working hours at his home so that all travelling time would have fallen during a period of earning. The circumstance that the employee was being paid while travelling there does not alter the character of the expenses of travelling.
ATC 611
12. However, the taxpayer relied upon a further consideration, namely, that when she received a phone call from base advising her that she was required to attend for duty she was then advised by base of the identity of the patient to be transported, with some particulars of the state and condition of the patient. Sometimes the information as to the medical condition of the patient was considered to be inadequate for the taxpayer's purposes and she would request base to ascertain additional information from those then having charge of the patient. Ordinarily this additional information would be provided to her when she arrived at the base but occasionally it would be supplied to her before she departed for the base. On the basis of the information provided she could on occasion give notice to base of matters she wished to be attended to in preparing the patient for presentation to her on her arrival at the base. So it was said that not only was the taxpayer ``on duty'' during the waiting period at her home, a duty for which she was being remunerated, but in addition the performance of her nursing duties commenced with the delivery of that information to her so that from that point of time forward she was professionally responsible for the well-being of the patient. In that way her claim was likened to that of the ``on-call'' anaesthetist whose claim for travelling expenses between his home when he was on-call and the hospital were allowed by the House of Lords:
Owen
v.
Pook
(1969) 2 All E.R. 1
. That finding was founded in a fact recorded in the case stated, namely [at p. 3]:
``All his work in connection with those appointments was concerned with emergency cases at the hospital. On receipt of a telephone call from the hospital he would give instructions to the hospital staff (e.g., to prepare the patient for an operation). Usually he then set out immediately to the hospital by car. Sometimes he advised treatment by telephone and then awaited a further report... His responsibility for a patient began as soon as he received a telephone call.''
(I add that that responsibility would continue in relation to any patient whom he authorised to be anaesthetised until the patient had recovered.)
13. Important though the role of nurses is, whether it be in a general ward; a recovery room; an intensive care unit; or in a storm-tossed aircraft tending a critically ill patient with no medical practitioner in attendance, I cannot accept that prior to the patient being physically entrusted to the care of a nurse casts on her responsibility for a patient while at the same time the immediate responsibility for that patient lies with others, including medical practitioners, in whose care the patient then is.
14. I conclude by holding that no portion of the motor vehicle expenses incurred by the taxpayer in travelling between her home (or equivalent) and place of employment qualifies her for a deduction pursuant to sec. 51 of the Income Tax Assessment Act.
15. That being so it is unnecessary to consider what findings would have been appropriate as to quantum. I simply observe that the material placed before the Board might have been adequate to the purpose if the ``on globo'' claim of the taxpayer had been wholly sustained. But once several distinguishing classes of travelling appeared there was little evidence by which to judge what proportion of total expenses should have been allowed. That difficulty was compounded when it emerged in evidence that the taxpayer was entitled to six weeks of annual leave each year, and in the year in question had been on a training course for some five to six months.
16. The second element of the taxpayer's claim related to a claim to deduct the purchase price of a ``replacement watch''. At some date unknown during the year of income the taxpayer purchased a ladies wrist watch bearing the name of a reputable watchmaker. As well as using the watch for all ordinary purposes unrelated to her nursing, she also used it as an aid in assessing and measuring the condition of patients in her care; to ensure that treatment and medication is administered to a time-scale directed by medical practitioners; and as a means of enabling her to maintain an accurate and chronological record of the patient's medical condition. As was to be expected, the watch was not only an adornment but was functionally efficient and durable. At the date of hearing in July 1985 the watch was still the principal watch of the taxpayer. The watch being an item of capital, no deduction can be allowed under sec. 51. Further, I am of opinion that in the absence of evidence that the accuracy of the watch was highly exceptional
ATC 612
for a wrist watch or that an exceptionally high degree of accuracy in measuring time or recording times was required of the taxpayer, I would conclude that the wrist watch was an item of a private nature. The use of a watch or other time-piece is important to most people in the community whether it be used to co-ordinate with public transport; or to ensure not commencing work too early or finishing too late; or to log overtime or measure tea-breaks; or as used by parking meter inspectors to log offences; or by detectives to measure the duration of interrogations or the timing of conduct observed; or by bus drivers to assess variations from timetable.17. However, for the purposes of sec. 54 relating to depreciation the circumstance that the watch is private in nature is irrelevant:
F.C. of T.
v.
Faichney
72 ATC 4245
at p. 4251
. That being so the wrist watch of this taxpayer was a depreciable item just as a wall clock in the study of Faichney would have been, even though it was not used to establish for measurement or recording purposes time factors relevant to his research. But unlike the carpet and curtains in Faichney's study the wrist watch of this taxpayer was not used exclusively for work-related purposes. Apart from the hours given over to sleep, the watch was always in use, but it was only used for work-related purposes when the taxpayer had in her care a patient whose condition was such that the taxpayer needed to use the watch as an aid in measuring or recording time, although she needed to wear or carry it whenever on duty.
18. However, the taxpayer faces a further difficulty in that sec. 190 provides that ``the taxpayer shall be limited to the grounds stated in (her) objection''. Even assuming that the objection was sufficient to raise a sec. 51 question, in my view it was quite insufficient to direct the Commissioner's attention to the quite different issues relating to a claim for depreciation. The result is that once again the section operates to deny an entitlement which the taxpayer would have had but for that strict procedural limitation.
19. That being so I would uphold the assessment of the Commissioner in all respects.
Claims disallowed
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