Case J63

Members:
MB Hogan Ch
N Dempsey M
P Gerber M

Tribunal:
No. 3 Board of Review

Decision date: 25 October 1977.

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M.B. Hogan (Chairman): The decisions of my colleagues adequately set out those facts in relation to this matter which were brought to the Board's attention. I would advert only to one further fact. The taxpayer's representative submitted a letter dated 29th July, 1977, addressed to him as managing-director of the taxpayer company; the letter which was signed by the Chairman of the Advisory Committee on Vehicle Performance of the Department of Transport, and which enclosed a copy of the Australian Design Rule and Draft Regulation definitions, advised that amongst other terms, the term ``Load'' was not used in the regulations and was not therefore defined.

2. The terms of the legislation that would operate to exclude the cost of the vehicle in question from the benefits of double-depreciation (sec. 57AD) and investment allowance (sec. 82AF) read so far as they are relevant to this reference: -

``Section 57AD (1) In this section, `plant' means property that is plant for purposes of section 54, but a motor vehicle (including a vehicle known as a four wheel drive vehicle) that is -

• (a)....
• (b)....

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• (c) any other road vehicle designed to carry a load of less than 1 tonne or fewer than 9 passengers,

shall not be treated as plant or an article for purposes of this section.''

``Section 82AF (1)....

(2) This Subdivision does not apply in relation to -

• (a) motor vehicles (including vehicles known as four wheel drive vehicles) that are -

• (i)....
• (ii)....
• (iii) other road vehicles designed to carry loads of less than 1 tonne or fewer than 9 passengers.''

Quite properly, in my opinion, it was not argued (though it was discussed in the course of the hearing) that the delivery van in question was excluded as being a ``motor car, station wagon, panel van, utility truck or similar vehicle''. Each of these classes of vehicle appears to fall under the genus of vehicles defined either as ``Passenger Car'' or ``Passenger Car Derivative'' in the Australian Design Rules.

3. The emphasis on the ``design'' factor in both pieces of legislation is quite clear, and, in my view, the answers to the question posed by this reference have to be sought with the assistance of the definitions in the Australian Design Rules. As has already been noted, the term ``load'' is not used in those Rules and therefore has not been defined. There being no definition of the word ``load'' in the Rules, I have turned my attention to those relevant factors in the Australian Design Rules for which definitions are provided and from which an interpretation of the word ``load'' might be derived.

4. I find the relevant definitions to be -

• (i) ``Maximum Loaded Vehicle Weight''
• This is defined as meaning ``for a goods vehicle, the gross vehicle weight as defined.''
• ``Gross Vehicle Weight'' in turn is defined as ``the maximum weight of a goods vehicle for which compliance with current and appropriate Australian Design Rules has been or can be established.''
• (ii) ``Unladen Weight''

This means the weight of a vehicle with a full capacity of lubricating oil, coolant and fuel but without goods, occupants or options except those options which are essential to the test for which unladen weight is specified.

5. Using these definitions, the Commissioner contended for a formula for calculating ``load'' which proceeded by deducting from the gross vehicle weight (in this reference 2300 kg.), the unladen weight of the vehicle (in this reference 1195 kg.) and then deducting a further 136 kg., i.e., twice the Australian Design Rule standard weight of 68 kg. to be allocated under various circumstances to each seat belt position provided. In the result, counsel for the Commissioner contended for a ``designed load carrying capacity of 969 kg.''

6. As authority for the proposition that a notional weight allowance for two persons had to be deducted when calculating the load which the vehicle was designed to carry, the Board was referred to
Dickson v. Brown (1959) S.L.T. 207 and
Houghton v. Trafalgar Insurance Company Limited (1954) 1 Q.B. 247 . It was said that both of these cases supported the proposition that human-beings were excluded from the concept of load.

7. The first case concerned the driver of a car charged with a driving offence, and the complaint against the driver was that he -

``... did use his vehicle when the number of passengers carried in it, namely two passengers, and the distribution and adjustment of the loading consisting of the said two passengers was such that danger was likely to be caused to any of the passengers of the said vehicle or to persons on the road.''

The Court, in allowing the appeal and dismissing the complaint, found that there was a distinction inherent in the regulation under which the complaint was brought ``between passengers and load - the human and the non-human cargo.''

8. The other case to which the Board was referred (Houghton v. Trafalgar Insurance Company Limited) was concerned with the interpretation of the words ``any load in excess of that for which it (a passenger car in this instance) was constructed''. It was held that

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the words covered only cases ``where there is a weight load specified in respect of the motor vehicle, be it lorry or van'', and it was noted by the court that there was no such specified weight load in respect of an ordinary private car. Accordingly, although the vehicle involved - (a private motor car) - was carrying one more than the number of persons for whom seats were provided, it was not carrying a ``load in excess of that for which it was constructed''. Counsel for the Commissioner sought to argue from this that the same distinction between passengers and cargo, which latter word he appeared to equate with ``load'', was inherent in the Australian income tax legislation with which this reference is concerned. He claimed that the distinction could be perceived in ``the sections themselves between loads and passengers'', going on to point out that the nine passengers referred to in the latter part of the exclusory clause ``do not include the driver'', and adding that ``he'' (the driver) ``is not part of the load.''

9. I am afraid that this final strand of argument is in conflict with the definitions in the Australian Design Rules. The reference to ``9 passengers'' in the context both of sec. 57AD(1)(c) and sec. 82AF(2)(a)(iii), stems clearly to my mind from the definition of ``Omnibus'' in the Rules; that word is defined to mean -

``...any motor vehicle equipped to seat more than eight adult persons (including the driver) used for the carriage of passengers.''

It is clear from the definition that, in the Design Rules, the driver is classed as one of the ``more than eight adult persons'' which an ``Omnibus'', as defined, must be equipped to seat. As a matter of interpretation, I would consider that, in the light of the Design Rules, the driver would be included as one of the passengers in determining whether or not a vehicle was designed to carry nine passengers or more for purposes of the Assessment Act. In counsel's own terms, clearly the driver is part of the ``load'' for purposes of the latter part of the exclusory paragraph. Perhaps the matter can be taken no further than to say that the distinction between load and passengers which counsel sought to establish, cannot be supported by the contention that the driver is distinguished from passengers as part of the load factor in the second part of the paragraph.

10. I have reached the view that there are not the same distinctions between human and non-human cargo inherent in the income tax legislation that the Scottish court found to be present in the regulation under which the prosecution underlying Dickson v. Brown was launched; I think the decision in Houghton v. Trafalgar Insurance Company Limited hardly bears the weight sought to be attributed to it in the circumstances of this reference. Nor do I see in the terms of the legislation itself the distinction between load and passengers for which counsel for the Commissioner contended. It seems to me that the legislation can be logically read so that the word ``load'' and the specified ``9 passengers'' are expressed as alternatives, inferring that the specified number of passengers represent another or alternate form of ``load''.

11. But I think the question central to this reference is answered simply by reference to the Design Rule definitions quoted above. The two relevant concepts are -

• (i) Maximum Loaded Vehicle Weight; and
• (ii) Unladen Weight.

In my view, the difference between the weights measured in accordance with these two definitions must constitute the load any vehicle complying with the Australian Design Rules is designed to carry. In accordance with this view, I find that the Volkswagen Delivery Van which is the subject of this reference, was designed to carry a load of 1105 kg.

12. I concur, therefore, in the decisions of my colleagues and direct that the objection should be allowed to the extent of reducing the taxable income by an amount of $2,139.