Case T7

Members: HP Stevens Ch
TJ McCarthy M

PM Roach M

Tribunal:
No. 1 Board of Review

Decision date: 17 March 1986.

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P.M. Roach (Member)

I have had the advantage of reading in draft the reasons for decision of the Chairman. I agree with him that it is very difficult to make precise findings about any aspect of this reference. However it remains the responsibility of the Board to make such findings of fact as the members consider appropriate in the light of the evidence which has been placed before the Board. If a judge had been called on to deal with a personal injuries claim for this taxpayer as a result of her suffering permanent disablement, he would not only have made his findings as to her past earnings and as to all the expenses incurred by her in the course of earning them (whether deductible or not), but he would go on to make findings as to what the financial results of her future career might have been. If a judge can make such findings it is not too much to expect this Board to make similar findings of fact appropriate to the determination of this reference, although the taxpayer cannot reasonably claim that she ought to be advantaged by any deficiency in the evidence before us.

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ATC 157

2. The evidence presented in support of the claim being as it is, I do not propose to make detailed findings of fact or make them in terms which are more precise than the evidence warrants. The findings I do make are set out below.

3. Throughout the year of income ended 30 June 1982 the taxpayer was a full-time student in a post-graduate diploma course at a conservatorium of music. She already held the degree of Bachelor of Music and also a Diploma of Teaching. She more probably than not resided at the suburb of Auburn throughout the year with her ``boyfriend''. Her studies at the Conservatorium required her to attend there on three days per week. Her income-earning activities called for her to perform as a musician or vocalist or both at:

• A - on most Friday nights; all Saturday nights; and occasional Sundays from about October 1981. She earned $5,760 which would appear to be at a rate of approximately $75 per night.
• B - for six nights per week for a period of six weeks at a hotel during a period when she was not working at A (she earned $1,400 which would appear to be approximately $40 per night).
• C - for five nights per week at a suburban hotel said to be for a period of 22 weeks. She earned $2,098. If the period of 22 weeks is accurate (which I doubt) that would appear to be a rate of $20 per night.

4. In addition during most of the first half of the fiscal year the taxpayer attended twice per week by day to give music lessons and demonstrations at D. (She earned $1,216 which would appear to be an earning rate of the order of $25 per session.) For the most part she travelled between Auburn and A, B, C and the Conservatorium by car. As occasion required, outward travel to places of employment would be via the Conservatorium. On the few occasions when she was required to attend at both A and D on a Friday she travelled by car to D and from there to A because time did not permit her to return home. Travel to A, B and C was always by car. She also travelled by public transport.

5. Prior to commencement of employment at A the taxpayer used her parents' car to travel to C, although how she travelled from her own home to that of her parents before and after work was unexplained.

6. When she commenced work at A - which of all the places mentioned was the one furthest from Auburn - she purchased a 1972 1200 cc Corolla sedan for $2,500.

7. Now as a result of the foregoing matters the taxpayer claimed income tax deductions in the sum of $165 as the cost of transport by train and buses and $3,098 (described as ``travelling Corolla 15,488 Kil. at 20c''). Included in one analysis of her total vehicle costs was a claim for $416 for parking fees while attending the Conservatorium. (The conflicting assertions made by or on behalf of the taxpayer at different times have been commented on by the Chairman and I do not repeat them. I also note that even when the taxpayer annotated a letter in which she acknowledged having owned the Corolla for only eight months of the year she contemporaneously claimed to have used it throughout the year. Such inconsistencies do not ease the task of making appropriate findings. However, I do not consider the taxpayer to have been deceitful in these matters. Rather I think that it was a case of the mind of the taxpayer being more readily responsive to the sound of music than the tabulation of figures and the maintenance of financial records.)

8. The taxpayer by her representative sought to sustain her claim to a deduction in relation to the costs incurred in travelling at all times between her home and all of the other places mentioned on the basis that throughout the year she was carrying on business and that all her musical activities, whether as a student or as a musician, vocalist, teacher or demonstrator were integral parts of that business. I reject that submission. The taxpayer was a music student who used her musical skills and talents to earn an income as an employee in several employments. That being so then, in the absence of special circumstances, neither her cost of travelling between her home and any particular place of work nor her costs of travelling between those places of work or to or from the Conservatorium qualify her for the deduction she seeks (cf. the decision of the Full Bench of the High Court of Australia in
Lunney v. F.C. of T. and Hayley v. F.C. of T.) (1957-1958) 100 C.L.R. 478 .

9. However, I do find that relevant special circumstances did exist in relation to travel

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ATC 158

between Auburn and A in that on each occasion she was to perform at A she had to transport equipment which could not have been readily transported by public transport. I therefore accept that on the authority of
F.C. of T. v. Vogt 75 ATC 4073 the taxpayer is entitled to a deduction in respect of those occasions, but those occasions only. The difficulty is to determine in what amount the deduction should be allowed.

10. Several aspects of that difficulty have been detailed in the reasons for decision of the Chairman and I do not propose to repeat them. What is asked for is an exercise of judgment resulting in a finding of fact. I am of the view that the finding proposed by the Chairman is an appropriate one. If anything it errs in favour of the taxpayer. I join with the Chairman in the determination he proposes.

Claims allowed in part