Federal Commissioner of Taxation v. Forsyth.

Stephen J

Mason J
Murphy J
Aickin J
Wilson J

Full High Court

Judgment date: Judgment handed down 1 April 1981.

Stephen J.

I have, in the case of
Handley v. F.C. of T. [81 ATC 4165], expressed my views upon the question of sec. 51(1) of the Income Tax Assessment Act and its application to so-called home office expenses. These appeals also relate to such expenses but in this instance they consisted of weekly payments in the nature of licence fees payable in respect of the taxpayer's use for professional purposes of a study and associated facilities. No question of apportionment arises.

The study and associated facilities formed an integral part of the house which the taxpayer and his wife and family occupied as their home. The taxpayer and his wife, as the trustees of a family trust, were the owners of the house and as such granted the licence to the taxpayer.

ATC 4159

The Commissioner conceded that the licence arrangement was genuine and effective and that the area so licensed was used by the taxpayer entirely for his professional purposes as a barrister although forming a part of his home.

The Commissioner denied to the taxpayer the deduction of such licence fees but by a majority they were allowed on a reference to a Board of Review. The Commissioner's appeals to the Supreme Court of Victoria (Murphy J.) and thence to the Federal Court of Australia (Bowen C.J., Deane and Fisher JJ.) were unsuccessful; hence the present appeals to this Court.

My conclusion in Handley necessarily leads me to dismiss the present appeals by the Commissioner. This is if anything an a fortiori case to that of Handley, it certainly presents a simpler factual position and is devoid of questions of apportionment. I am in agreement with the joint judgment of the Federal Court and would for the reasons there stated and for the further reasons stated by me in Handley dismiss these appeals.

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