Case P82

Judges: MB Hogan Ch
P Gerber M

GW Beck M

Court:
No. 3 Board of Review

Judgment date: 22 September 1982.

---

Dr. G.W. Beck (Member)

This taxpayer lived and worked on a prawn trawler operated out of Groote Eylandt throughout the entire tax year ended 30 June 1979. The trawler was actually at sea for more than half the year and for the balance of the year it was moored in Groote Eylandt or was receiving service there. The full circumstances have been set down by my colleagues together with certain agreed facts presented to the Board. Although Groote Eylandt is in an area prescribed by the Act as ``Zone A'', and residents of Zone A are entitled to a rebate of tax in accordance with sec. 79A, the Commissioner refused to grant this taxpayer the rebate.

2. Given the wording of sec. 79A(1) which indicates that the purpose of the rebate is to compensate for disadvantages because of ``uncongenial climatic conditions, isolation and high cost of living'' it is discomforting to have to find against this taxpayer. In truth, living on a trawler in the waters of the Gulf of Carpentaria would surely be climatically more uncongenial, more isolated and more costly than living on Groote Eylandt, but the simple fact is that, with the best will in the world, I cannot go beyond the explicit description of what constitutes Zone A which appears in Pt. I of Sch. 2 of the Act.

3. As I read sec. 79A(4) there are two types of taxpayer entitled to zone rebates. The first is the taxpayer who resides in one or other of the specified zones in the ``prescribed area'' for more than half the year regardless of how much time he spends in the zones (sec. 79A(4)(a)) and the second is the taxpayer who spends more than half the year in the prescribed area regardless of where he resides (sec. 79A(4)(b)). The conclusions reached by the then Chairman of this Board, Mr. F.E. Dubout, in Case A47,
69 ATC 278 , and considered by Dr. Gerber in para. 4 of his reasons, were in relation to a seaman who maintained a house and supported a family in a town in Zone B but spent ten of every fourteen days at sea in coastal waters off a part of mainland Australia that was in Zone A. In effect, this taxpayer was a resident of Zone B throughout the year, but spent more than half of the year outside the zone. The Board confirmed the assessment granting Zone B allowance and said during the ten days of each fortnight that he was sailing coastal waters he was not in Zone A because the word ``mainland'' in the description of Zone A in Pt. I of Sch. 2 did not comprehend coastal waters. With respect, I agree with that Board decision. However, had this same taxpayer spent ten days of each fortnight scouring the beaches in Zone A for driftwood or some other desirable commodity he would have fallen into the second type of taxpayer (sec. 79A(4)(b)) and I consider he would have been entitled to Zone A allowance because, although resident in Zone B, he spent more than half the year actually in Zone A. The reasoning in Case A47 was consistently applied by this Board in similar circumstances in Case B10,
70 ATC 45 . Applying the reasoning in Cases A47 and B10 (which I accept) to the particular circumstances of this case, it can be summarised:

• (a) this taxpayer lived only on the trawler and maintained no residence and supported no family elsewhere;
• (b) she could not be considered to reside anywhere but on the boat;
• (c) the boat was on water away from moorings or port for more than half the year;
• (d) coastal waters are not part of any zone specified in Sch. 2 of the Act;
• (e) it follows that the taxpayer could not have resided in an area encompassed by a zone description for more than half the

  ---

  ATC 407

  year, nor could she have physically been in such an area;
• (f) the taxpayer therefore does not fall into either of the types of taxpayer entitled to a zone rebate.

4. It should not be thought that I am questioning that the taxpayer is a resident of Australia. The waters around Groote Eylandt are Australian territorial waters and it seems to me well settled that a person living throughout the year on a floating craft in such waters resides in the country to which the waters belong (
Bayard Brown v. Burt (1911) 5 T.C. 667 and
F.C. of T. v. Miller (1946) 73 C.L.R. 93 ).

5. I confirm the Commissioner's assessment.

Claim disallowed