Case U107

Members:
DP Breen DP
P Gerber SM
KL Beddoe SM

Tribunal:
Administrative Appeals Tribunal

Decision date: 7 May 1987.

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D.P. Breen (Deputy President), Dr P. Gerber and K.L. Beddoe (Senior Members)

The applicant in this case is a ground maintenance aircraft engineer employed by an airline company at its Brisbane Airport. It is a term of his employment that he supply his own tools. These were kept in two substantial tool boxes of a size and weight which we accept could not be carried on public transport. The tools were valued at around $3,500. In the year now under review (1985) the taxpayer travelled from home to work and back to home in his own car, carrying his tools in the boot. It is the cost of this travel ($2,800) which is in issue. Quantum is not in dispute. Since we have concluded that, on the facts of this case, the claim must succeed, the facts will need to be set out in some detail.

2. The hangar in which the taxpayer does the bulk of his work can be lawfully entered by the large population of airport personnel who have been issued with an appropriate identification tag. In theory, the hangar had been rendered "public proof". The employer provides open steel racks for storage of its employees' tools. No lockers are provided. Apart from the general security system which operates at the airport, including the hangars, there are thus no means by which staff can secure their tool boxes against theft. It was acknowledged by the assistant maintenance superintendent in evidence that one tool box had, in fact, been stolen in the past. This theft took place well over a decade ago and the witness "surmised" that it was stolen by a member of the public which, at that time, was not effectively barred from access to the hangar. The evidence suggests that petty theft in the security area is rife and both the taxpayer and another witness employed in the same capacity deposed that they had, on occasion, lost some tools, although neither was able to say positively that such loss was either attributable to theft and/or would not have occurred if there had been lock-up facilities at work. It would seem that the occasional loss of some tools is simply an occupational hazard which we have not taken into consideration in coming to our conclusion.

3. In 1983, the employer "lost" an anvil of substantial weight which would have required several men to move. It was assumed by all parties that this anvil was stolen. It was this theft which persuaded the taxpayer henceforth to take his tools home rather than expose them to the risk of theft at work. It was deposed and not challenged that the employer would not generally compensate a worker whose tools had been stolen at work, albeit this taxpayer surmised that the employer would not dismiss an employee thus deprived of his tools of trade. Be that as it may, the issue before the Tribunal is whether, against the whole background as outlined above, this taxpayer acted reasonably in taking his tools home each day and, if so, whether the expenditure thus incurred ceased to be "private" or "domestic", and thus excluded from deduction by subsec. 51(1) of the Income Tax Assessment Act; cf.
Lunney v. F.C. of T. (1958) 100 C.L.R. 478.

4. The respondent submitted, firstly, that the risk of theft was so minimal that the taxpayer's decision to take his tools home each day was unreasonable in the circumstances. Secondly, it was submitted that, even if the Tribunal were to find the decision reasonable, this did not have the effect of depriving the expenditure of its "private" or "domestic" characteristic. Additional support for this submission was sought from the fact that this taxpayer had, prior to the theft of the anvil, elected to transport himself to work by the use of his car, so that merely putting his tools in the car's boot did not alter either the nature of the trip or the character of the expenditure.

5. Not surprisingly, the applicant relied heavily on
F.C. of T. v. Vogt 75 ATC 4073;
F.C. of T. v. Ballesty 77 ATC 4181 and Case U29,
87 ATC 229. No less surprisingly, the respondent sought to distinguish these authorities.

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ATC 652

6. It is sufficient for present purposes for us to paraphrase the headnote in Case U29, a decision of Mr P.M. Roach (Senior Member):

• The taxpayer was a carpenter employed by a mining company. He generally worked at one site for four days a week and at a different site for the fifth day. The principal site of work varied from time to time.
• The taxpayer travelled to work by car and carried his own tools with him. The tools were bulky and for safety reasons could not be left at the site overnight.
• The taxpayer received a travelling allowance under an award and included the allowance as assessable income and claimed a corresponding deduction for his travel expenses. The Commissioner disallowed the deduction and the taxpayer objected.
• It was held that the expenses claimed by the taxpayer were allowable deductions under sec. 51(1). The employment created the need, as a matter of practical necessity, for the taxpayer to transport his tools from his home - where he was able to keep them safely - to his place of work. It was in practical terms necessary for him to transport them by car and it was appropriate that the car should be his own. His position was like the professional musician in F.C. of T. v. Vogt 75 ATC 4073, who needed to transport his instruments to the places where he performed.

7. The Commissioner sought to meet the problem created by this decision by asserting that there were only two circumstances where travel from home to work was an allowable deduction:

• (i) where the employee's work was inherently itinerant, as in
  Taylor v. Provan (1975) A.C. 194 (see also Case S29,
  85 ATC 276, where Board of Review No. 3 allowed a shearer the travel costs between home and the various shearing sheds on evidence that the nature of the work required shearing equipment - supplied by the worker - of a bulk which could not reasonably be transported other than by the use of the worker's private vehicle); and
• (ii) where a worker has two or more places of employment, of which
  F.C. of T. v. Wiener 78 ATC 4006 is the locus classicus.

The respondent placed heavy reliance on the fact that in both Vogt and Case U29, the employee was engaged on more than one work site. It is an imaginative submission, but it cannot succeed. We are satisfied that the fact that there were various work sites in both cases was merely incidental to the decision rather than constituting a material fact and forming part of the ratio decidendi. We are in agreement with Mr Roach's decision in Case U29, viz. that where the employment creates the need, as a matter of practical necessity, for a worker to transport his own tools of a bulk which makes it impractical (or indeed illegal) to carry them on public transport, the expense thus incurred constitutes an allowable deduction.

8. Mr Robb of counsel for the applicant, submitted faintly at the conclusion of his address that if the Tribunal were against him on the major issue, arguably there was here a twofold purpose in travelling between home and work by car, one of which was "private" or "domestic", the other work-related, so that the expenditure could justifiably be apportioned. This tentative concession was not taken up by Miss Wilson, of learned counsel for the respondent - properly so in our view. We do not believe that this is an appropriate case for apportionment. This taxpayer is one of those fortunate few who is able to hitch a free ride to work on his tool box - "free" in the sense that the cost of transporting this magic box from home to work and back again constitutes an allowable deduction incurred in the course of gaining the taxpayer's assessable income.

9. The Tribunal sets aside the objection decision in relation to the year of income ended 30 June 1985 and allows the objection in full.