Case W99

Members:
MD Allen SM

Tribunal:
Administrative Appeals Tribunal

Decision date: 16 February 1989.

---

M.D. Allen (Senior Member)

The facts in this matter are within relatively small compass and the determination of the taxpayer's application concerns the narrow point of whether a journey undertaken between a college of Technical and Further Education where he is a casual instructor and an office co-located with his residence is an allowable deduction.

2. From the evidence given before me and certain matters agreed as common between the parties I find:

• (a) the taxpayer had in the tax year under review his residence at 51 Moorland Road, Tahmoor;
• (b) at that address and within the residential building he also had a part set aside as an office from which he conducted business activities and saw clients;
• (c) the said business activities consisted of acting as a tax agent and also an insurance consultancy the bulk of which was concerned with fire and general insurance;
• (d) in addition to his tax agent and insurance activities the applicant was also engaged as a casual instructor in ``taxation'' at the Liverpool College of Technical and Further Education;
• (e) his teaching program at the TAFE college meant that on three days per week he was required to journey from 51 Moorland Road to the college;
• (f) the expenses of such part of the travel as was claimed as a deduction was in the sum of $1,315.

3. The applicant did not claim for the journey to and from the TAFE college in both directions. He claimed only the journey which

---

ATC 812

occured at midday when he either finished or, journeyed to commence his teaching. His argument was that when his duties required him to give lessons between the hours of 9 a.m. and 12 noon then it was the journey from the College back to his office at 51 Moorland Road that was a journey between places in which he gained assessable income. Similarly if his teaching duties commenced at 1300 hours then the journey from his office commencing around midday to the college was a journey between places where assessable income was gained.

4. I find that whereas the applicant did gain the bulk of his income from teaching, the commercial activities carried out at 51 Moorland Road were genuine income-gaining activities and although proportion is no real criterion the income gained from those activities did amount to some 30% of his income. That is to say the activities from his home office although minor cannot be dismissed as a sham or indeed as merely ancillary to his teaching.

5. The starting point for considering the applicant's submissions is the decision of the High Court in
Lunney v. F.C. of T. 100 C.L.R. 478. There is no necessity for me to recapitulate the well-known passages from that case here.

6. It is trite to say that that case has received extensive discussion by courts and tribunals. The latest exposition upon it being by Northrop J. in
F.C. of T. v. Genys 87 ATC 4875. At pp. 4878-4879 his Honour said:

``However, the general proposition laid down in Lunney, notwithstanding that it remains good law, is not exhaustive. In
Garrett v. F.C. of T. 82 ATC 4060, the Supreme Court of New South Wales constituted by Lusher J. held that it had no application to the following situations:

• (a) where the taxpayer keeps necessary equipment or instruments at his home which he needs for the purpose of performing his work, and by reason of its bulk, such equipment needs to be transported by vehicle from the home to his place or places or work and where the equipment is used at home;
• (b) where the taxpayer incurs expenses for travel between two places of business or work; and
• (c) where the employment can be construed as having commenced at the time of leaving home.

A fourth situation, not enunciated in Garrett, is where the taxpayer travels between home and shifting places of work, i.e. an itinerant occupation.

Before embarking upon a consideration of Lunney and the qualifications thereto outlined above, it is emphasised that neither the decision nor the qualifications are statutory law and should not be construed as though they were the words of an Act of Parliament. The question which this Court is called upon to decide is whether the travelling expenses incurred by the taxpayer are `losses or outgoings' incurred in gaining or producing the assessable income. The various categories referred to above are mere examples of how courts have applied sec. 51(1) in given circumstances.''

7. In passing I state that whereas numerous Board decisions were cited to me they are no more than decisions upon their own facts and some of the earlier Board of Review decisions may, as was pointed out in Case P6,
82 ATC 30 at p. 37, no longer be of even persuasive authority. This Tribunal is however bound by decisions in the Federal Court and in the Supreme Courts of the States - see
F.C. of T. v. Salenger 88 ATC 4449. In Garrett v. F.C. of T. 82 ATC 4060 Lusher J. said at p. 4063:

``On the other hand, where the travelling expenditure is incurred on journeys between different places of business or employment, the expenditure can be regarded as being a deduction within the subsection and this can be so even though one of the places of business may also be the home of the taxpayer, or the home can be so construed.''

8. I do not consider the applicant's business activities at 51 Moorland Road constituted what in Case P6, 82 ATC 30 at p. 36 were described as ``discreet'' activities. The connection between his teaching activities and his business activities were akin to those of a barrister who lectures in a legal subject aside from his practice or for example the accountant who teaches accounting subjects away from his practice.

9. Had the applicant conducted his business activities from an office away from his home,

---

ATC 813

for example in a local shopping centre and claimed for the journeys from his office to the TAFE college then the matter may well have been resolved using the precedents in cases such as Case 59,
2 C.T.B.R. (N.S) at p. 321.

10. Given the findings I have made and the remarks of Lusher J. in Garrett (supra) I cannot see how the fact that the applicant had his office at his residence takes this matter out of the previously settled principles.

11. The decision under review will be set aside and the matter remitted to the respondent with the direction that the applicant's tax be reassessed having regard to the finding that the sum of $1,315 was an outgoing including gaining or producing assessable income. I give liberty to apply.