Ben Vaughan v. Official Trustee in Bankruptcy
(1996) 71 FCR 34[1996] 1053 FCA 1
(Judgment by: Burchett, Carr and Kiefel JJ) Court:
Judge:
Burchett, Carr and Kiefel JJ
Judgment date: 21 November 1996
Hobart
Judgment by:
Burchett, Carr and Kiefel JJ
REASONS FOR JUDGMENT
THE COURT
This appeal raised a short point. The appellant, a bankrupt who argued his own case very well, contended that a quantity of wine (115 bottles) constitutes "ordinary tools of trade, plant and equipment ... of the bankrupt whose value does not exceed the prescribed amount" (ie: $2,000: reg. 40B) within the meaning of s.116(2)(c) of the Bankruptcy Act 196 .
The appellant's claim is plainly enough somewhat unusual; but it is made on the basis that he has conducted, and wishes to continue to conduct, wine appreciation courses or seminars, by which fees have been and would be earned. To do that, he says, he must have available for tasting a variety of wines, including older vintages, the qualities, provenance and development of which can be discussed and expounded. The learned trial judge accepted this proposition, and that Mr Vaughan is truly an expert on wine. Nevertheless, the appellant failed because it was held that the wine did not fall within the statutory description "ordinary tools of trade". Each bottle used at a lecture, as Mr Vaughan conceded in argument, is necessarily wholly consumed.
The exemption for tools of trade has a lengthy legislative history, both in United Kingdom and Australian bankruptcy statutes and in United Kingdom statutes dealing with distress for rent. Despite some differences of precise wording between the various provisions, courts have repeatedly referred to a judgment of Horridge J. as stating fairly the object of the bankruptcy exemption. The case was In Re Sherman (1915) 32 TLR 231 , where his Lordship, denying that documents "used by the debtor in the course of his employment" were "tools of his trade" within s.38 of the Bankruptcy Act 1914 , said:
"That exception was intended for the protection of workmen so that they might not be prevented from earning a livelihood with the implements of their trade."
Although, at one time, the Australian exception was limited to " hand tools" (see s.91(d), Bankruptcy Act 1924 , as amended in 1932; Re Gurr; Ex parte The Official Receiver (1947) 14 ABC 53 ; Re Schiller (1961) 19 ABC 271 ; and cf. Toledo- Berkel Pty Ltd v. Official Receiver in Bankruptcy (1953) 56 WALR 21 ), courts have, on the whole, given the provision, where it is not so limited, a generous interpretation. A pianoforte was held a tool or implement of a music teacher's trade in Boyd, Limited v. Bilham [1909] 1 KB 14 ; a sewing machine, it was said in Gonsky v. Durrell [1918] 2 KB 71 at 75, per Scrutton LJ, "may be a tool or implement of a man's trade" (see also Masters v. Fraser (1902) 85 LT 611); and a cab, in a case where a distress had been levied on a stable, was held an implement of its driver's trade: Lavell v. Richings [1906] 1 KB 480 , a unanimous decision of Lord Alverstone CJ, Ridley and Darling JJ.
It seems to us that this Court should not take a more restrictive path than these decisions suggest. But, as the trial judge said, apart from one possibly ambiguous decision to be mentioned, no court has regarded consumables as tools of trade. I think the point may be illustrated by reference to the cab in Lavell . It was a tool of trade, but chaff for the horse or, these days, a supply of petrol and oil at a taxi owner's depot, though essential to the plying of the trade, could not be described as tools, or indeed as equipment. Similarly a professional photographer's cameras and filters, but not the film used in the cameras, would be tools of his trade. Not everything used in, or essential to, a trade is a tool of that trade.
As ordinary English, the word "tool" and the expression "the tools of the trade" are defined in The New Shorter Oxford English Dictionary (1993) volume 2. We extract the following from those definitions, first, the definition of "tool", as follows:
"1 A thing used to apply manual force to an object or material, esp. a device designed for some particular mechanical function in a manual activity, as a hammer, a saw, a fork; an implement. Now also, a powered machine used for a similar purpose ... 2 transf. & fig. A thing (concrete or abstract) used in the carrying out of some occupation or pursuit; a means of effecting a purpose or facilitating an activity";
and secondly, the definition of "the tools of the trade":
"the basic equipment required for a particular occupation."
That the exemption has a limited function is suggested both by its wording, and also by its being confined to a prescribed value - an aspect of it which historically has long been, in some form, a feature of the exemption. Violence would have to be done to its language to stretch it to cover the appellant's wine.
The appellant referred to Re Dowell; Marks v. Dowell (Evatt J, unreported, 13/2/87), where printer's ink appears to have been included with what were plainly printing tools as a tool of the trade of a printer. But it does not appear that the question was argued, and there is no reasoning to support the conclusion relied on by the appellant.
The appellant also referred to the additional words in the subsection; however, of these only "equipment" seems even possibly of assistance. That word, which actually is used in the Oxford Dictionary to define tools of trade, relevantly has the same limitation as "tools" - it does not refer to consumables of the kinds discussed in these reasons. This is not to say that something which is a consumable from one point of view might not, in some circumstances, be an item of equipment from some other point of view. But in the circumstances of the present case the wine consumed during lectures should not be so regarded.
For these reasons, the appeal should be dismissed.