79 ATC 488
HP Stevens Ch
CF Fairleigh QC
JR Harrowell M
No. 1 Board of Review
Judgment date: 16 November 1979.
H.P. Stevens (Chairman); C.F. Fairleigh Q.C. and J.R. Harrowell (Members): In his return of income for the year ended 30 June 1977 the taxpayer, an army officer in the permanent force, claimed a deduction for an outlay of $65 for haircuts. This was disallowed by the Commissioner as being ``private'' within the meaning of sec. 51(1) and a notice of assessment issued accordingly. The taxpayer objected thereto, the Commissioner decided to disallow the objection and his decision was referred to a Board for review.
2. Quantum was in issue but in broad terms the taxpayer has shown that in the 1977 year he outlaid approximately that sum of money in payment for haircuts.
3. The taxpayer supports his claim by the provisions of the Army Dress Manual. This manual is in the course of being recast prior to being reprinted and there are two versions before the Board. One substantial distinction is that the document as proposed to be promulgated contains three pictorial illustrations of the length and style of male members' hair, whilst the earlier/current edition relies on description. The frontal illustration shows the hairline comparatively high on the forehead, with a part on the left side and side-levers not quite to the lowest point of the ears; the rear view shows the hairline a little above the shirt collar with the hairline being in a continuous curve from ear to ear; the third illustration defines the maximum width of sideburns as three centimetres.
4. The general statement in the proposed manual is that hair is to be neat and groomed in accordance with the guidelines, viz., the hair at the back and sides must be tapered and not square cut; the ears are to be exposed; the hair at the back of the head is not to extend below the upper edge of the buttoned shirt collar; in all cases bulk or length of hair is not to interfere with the wearing of military head dress; hair is not to show on the forehead under the head dress; sideburns are not to extend below level with the points where the ear lobes join the face; sideburns must be neatly trimmed. The face is to be clean shaven (with some permitted exceptions) below the level of the eyes except when sideburns or a moustache is grown and the latter is also of regulation type.
5. In what seems to be the current Army Dress Manual there is a direction that the orders referred to in the preceding paragraph and others of the same ilk are to be administered in a reasonable, tolerant and commonsense manner; and that within specified guidelines modern hairstyles may be worn with acceptability being judged on neatness and grooming. Whether that qualification will be included in the new manual is at present a matter for conjecture.
6. The taxpayer points out that the authority for the Army Dress Manual is Australian Military Regulations and Orders No. 1328 which are dependent on sec. 83-85 of the Defence Act.
7. Thus the taxpayer says that he has no choice in the matter and it is a requirement of his profession directed to safety, hygiene, training, discipline and morale.
8. The army did not provide a regimental barber to ensure that its instructions were observed and members of the army attended ordinary civilian barber shops, generally at such time and place as the member chose.
9. The taxpayer has deposed to his ``enforced'' mode of haircut as being ``distinctively army''. But he acknowledges that it is not peculiarly army as it is virtually indistinguishable from the style of haircut common to members of the police force and to other sectors of the community, e.g., process workers where trailing hair could be a hazard. His description for the haircut is ``short back and sides'', yet it is not that of the razor shaven base of neck style that is brought to mind by that phrase. However that is simply a matter of personal impression. Doubtless a member of the army would not be permitted to have a ``Prince Valiant'' hairstyle no matter how neat and tidy it was. If the claim is to succeed at all then it must come within the first positive limb of sec. 51(1) and not be within the exceptions thereto.
10. Dr. Gerber has pointed out in Case H32,
76 ATC 280, that little if any assistance is given by such phrases as ``necessary and peculiar'' and ``abnormal expenditure'' by which he says Boards of Review at times have sought to introduce some vague principles of equity into a taxing statute.
Burton v. F.C. of T. 79 ATC 4318
79 ATC 490
at p. 4320 Smith J. rejected the Board's expression of ``real connexion'' as a satisfactory description for a first limb sec. 51(1) deduction. Phrases such as ``perceived connexion'' and ``incidental and relevant'' are obviously not intended by their authors as a paraphrase of either positive limb of sec. 51(1); so also with ``part and parcel''.
12. The taxpayer succeeds in bringing his claim within the first positive limb of sec. 51(1) because as Smith J. said in Burton ``... in respect of an employee the question invariably has been whether the evidence supported the conclusion that the outlay... was incurred expressly or impliedly by reason of or in pursuance of the contract of employment''. Thereupon it is necessary to consider the exceptions which are set out in sec. 51(1).
F.C. of T. v. Forsyth 79 ATC 4505 at p. 4508 Murphy J. said:
``The cost of clothes purchased to enable a person to appear respectably in public are of a private or domestic nature, and do not become outgoings incurred in gaining or producing the assessable income simply because they are worn, and must necessarily be worn, when gaining the assessable income. Nor does the cost of having such clothes drycleaned in the ordinary course constitute such an outgoing.''
14. The insistence of the employer (though it be a condition of employment) that an employee be well-groomed relates to life style and so it is a matter of a private nature (as discussed in greater detail in Case K2,
78 ATC 13 at pp. 15, 16). Therefore the expenditure which is here in issue is denied by the exclusion of ``private nature'' as set out in the proviso to sec. 51(1).
15. The decision on the objection is upheld and the assessment is confirmed.