Case P106

Judges:
KP Brady Ch
LC Voumard M
JE Stewart M

Court:
No. 2 Board of Review

Judgment date: 2 December 1982.

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K.P. Brady (Chairman); L.C. Voumard and J.E. Stewart (Members)

This reference concerns the year of income ended 30th June, 1980, and the question of whether there were ``special circumstances'' within the meaning of that term in sec. 159L(4) of the Income Tax Assessment Act 1936 that would make it ``just'' to allow the taxpayer a

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ATC 564

rebate in respect of housekeepers who were separately employed at varying periods during the year of income in issue to keep house for her and to care for her children. At the hearing of the reference before us, the Commissioner's representative conceded (we consider correctly) that each of the housekeepers, when employed by the taxpayer, was wholly engaged in keeping house for her as required by the provisions of sec. 159L(1) of the Act. Further, it was agreed between the parties that only an amount of $562, in lieu of the rebate amount of $597 that is allowable for a full year, could be allowed because no housekeeper was employed during a three-week period in the year of income.

2. In this case the taxpayer is married and has two children under 16 years of age. During the year of income, the taxpayer was employed full time as a research officer and as a university lecturer in medicine. Her husband was a university student until he commenced employment as a medical practitioner early in 1980. The evidence is that the taxpayer employed three persons at different times of the year (for a period totalling 49 weeks) to care for her children and to carry out some associated domestic tasks. The children are normal and healthy and their needs appear to be no different from those of any other normal children. However, because of the calls made upon the time of the taxpayer and her husband arising out of their various activities, housekeeper assistance was engaged to ensure that the household was appropriately cared for and that the children were assured of continuity of care in the environment of a happy home life. To ensure that that might be so, the taxpayer carefully selected girls as housekeepers who were fully qualified mothercraft nurses. Apart from some variations which need not trouble us here, the housekeepers were employed on Mondays to Fridays inclusive, from 8.30 a.m. to 5.30 p.m.

3. The taxpayer's working hours were flexible, but generally fell within the standard times of 8.45 a.m. to 5.15 p.m. However, there were occasions when she would commence duty earlier or finish later depending upon the time taken for certain lectures and the nature of some research that was being undertaken. She frequently worked at home at nights correcting examination papers or preparing lecture notes. On occasions she worked at weekends.

4. Both as a sixth-year medical student and as an intern in a public hospital, the taxpayer's husband was required to work long hours. The hours of duty varied greatly week by week, and even on a daily basis. Generally, however, the hours would extend from early morning until the evening, subject to special calls that required his attendance until late at night, sometimes all night. When working shifts on special projects, he was required from time to time to live-in at the hospital. Weekend work was also frequently undertaken by him.

5. It was submitted by the taxpayer's representative that the ``special circumstances'' for the purposes of sec. 159L(4) were not simply that she and her husband were both medically qualified or that both, in their capacities as medical practitioners (and the husband before that as a sixth-year medical student), led very full, busy and unpredictable lives insofar as working hours were concerned because of the nature of the work that they were required to undertake. As we would understand the submissions put to us by the taxpayer's representative, ``special circumstances'' were said to exist principally because (i) in the income year in issue the husband was involved almost to the exclusion of all other activities in the completion of his medical course and in working in a hospital environment full time where the hours were long and the duties arduous, and (ii) the taxpayer, in her capacity as a wife and mother, was not able (without outside help) to effectively manage the household affairs or to adequately care for the children during the working week because of her financial need as the family breadwinner to continue in her job throughout the year of income. The representative's submission concerning the meaning of the word ``just'' for the purposes of sec. 159L(4) was somewhat vague but, in our understanding, it included the proposition that ``it is the just administration of the law which is inferred'' and the further proposition that to be ``just'' the circumstances of a given case must be genuinely special so that the allowance of a rebate is both fair to the taxpayer making the claim and to taxpayers generally. We would respectfully agree with those submissions.

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ATC 565

6. The submissions put to the Board by the Commissioner's representative concerning the meanings of the terms ``special circumstances'' and ``just'' do not appear to be substantially dissimilar from the propositions relied upon by the taxpayer. However, the Commissioner's representative denied (perhaps not unexpectedly) that ``special circumstances'' existed in the instant case which would make it ``just'' to allow the rebate. His submissions in support of the assessment may be summarised as follows:

• (i) One of the meanings attributed to the word ``special'' in the Shorter Oxford English Dictionary is: ``Of such a kind as to exceed or excel in some way that which is usual or common; exceptional in character, quality or degree''. The circumstances of the instant case when viewed as a whole, the submission continued, were not ``special'' within that meaning, thus leading to the conclusion that it would not be ``just'' to allow the rebate as claimed.
• (ii) The taxpayer's children are normal and healthy and their needs are no different from those of any other normal children. Therefore, it was submitted, the care required by the children is in no way ``special'' in the dictionary sense and, furthermore, it is distinguishable from the care found to be necessary in Case M83,
  80 ATC 613 (where the decision upheld the taxpayer's claims), where the taxpayer's child was severely handicapped and required constant attention. We would agree that the circumstances as found in Case M83 are distinguishable from those to be found in the instant case, and no further comment in this matter needs to be made by us.
• (iii) While the taxpayer and her spouse were (at least for the latter half of the year of income) engaged in full-time employment away from the family residence, it was not a circumstance that was unusual or special in modern times when it is common to many households (for one reason or another) for both parents to be engaged in full-time employment. In that connection it was also submitted that neither the taxpayer's nor her spouse's hours of work were unduly or unusually long, nor were their absences from the home of unusual frequency or duration.
• (iv) The nature and importance of the taxpayer's occupation (and that of her husband) do not constitute special circumstances. We accept that submission and make no further comment in connection with it.
• (v) The facts in this reference are distinguishable from those in Coleman's case (Case J70,
  77 ATC 579) where this Board (as then constituted) decided that special circumstances existed because of the taxpayer's extremely busy public life and the need to maintain through the housekeeper a continuity of stable home life for the benefit of the taxpayer's son. We would agree that the circumstances of Case J70 are distinguishable from those to be found in the instant case.

7. While the meaning of the words ``special circumstances'' might be thought to be wide and flexible and not capable of being exhaustively defined, it seems to us that in the context in which they appear in sec. 159L(4), some limitation to their meaning is necessary for the purpose of ensuring that the word ``just'' appearing after them in the subsection is capable of being given a meaning that falls within the apparent intention of the legislature to provide some limit to its application. It seems to us that, if this were not so, almost any set of circumstances pertaining to a particular taxpayer (whether arising from some initiative taken by him or not) could well be described as special to that taxpayer and a rebate could thus become available to him accordingly. We do not see the subsection as creating a type of ``choice'' principle that could enable working husbands and wives with children under the age of 16 years to so arrange their affairs that a rebate would automatically be allowaable to one or other of them. It seems to us therefore that the word ``special'' introduces an initial limitation in the sense that the determining circumstances giving rise to the rebate must bear the dictionary meaning of being exceptional in character and, also, that they must arise from external forces (albeit beyond the control of the taxpayer) as distinct from any voluntary acts that might

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ATC 566

be undertaken by him. We would understand the word ``just'', in the context in which it is used, to mean that which is right and fitting with regard to the circumstances of a particular case, the revenue and to taxpayers generally.

8. The taxpayer impressed us greatly as a witness, and we appreciate her acceptance of the financial and other family responsibilities for the purpose of enabling her husband to pursue his medical career. Unfortunately for her, however, we cannot accept that the circumstances applying in her case, even though onerous, were ``special'' for the purposes of the subsection. Her circumstances did not raise for our consideration criteria such as financial hardship, problems associated with marital status or matrimonial affairs generally, or ill health of the children which, in appropriate cases, might justify a finding of ``special circumstances''. As already indicated, the taxpayer's circumstances arose by private choice out of the personal decisions by her and her husband. We do not see them as being exceptional in character or uncommon in the sense required by the subsection and, in any event, we do not think that they were of such a nature that it would be ``just'' to allow the rebate.

9. For the above reasons, we would uphold the Commissioner's decision on the objection and confirm the assessment in issue.

Claim disallowed