Case: Clean Investments Pty Ltd v Commissioner of Taxation [2001] FCA 80 ; (2001) 105 FCR 248 
Outcome: considered
The decisions in Diethelm Manufacturing Pty Ltd v Commissioner of Taxation (1993) 44 FCR 450 (' Diethelm '), Commissioner of Taxation v Chubb Australia Ltd (1995) 56 FCR 557 (' Chubb '), Clean Investments Pty Ltd v Commissioner of Taxation [2001] FCA 80 ; (2001) 105 FCR 248 ( 'Clean Investments ') and Hygienic Lily Ltd v Deputy Commissioner of Taxation (1987) 13 FCR 396 (' Hygienic Lily ') all involved the construction and application of an expression found in Item 1 of the Third Schedule of the Sales Tax (Exemptions and Classifications) Act 1935 (Cth), namely 'goods ... of a kind ordinarily used for household purposes ...'. I will not attempt to discuss every relevant aspect of these cases because they were reviewed at length by Lindgren J in Clean Investments at 260-274 [35]-[103]. 81 First, the word 'ordinarily' means 'commonly' or 'regularly', not 'principally', 'exclusively' or 'predominately': see Clean Investments at 273 [97] per Lindgren J; Chubb at 560 per Burchett J, and at 57 per Hill J; Hygienic Lily at 399-400 per Gummow J. Counsel for the respondent invited me to depart from these authorities, and to hold that the word 'ordinarily' as used in s 74A(2)(a) means 'predominately'. In view of the authorities to which I was referred, I doubt that I am free to adopt such a construction. In any event, I am not persuaded that the word 'ordinarily' in s 74A(2)(a) means 'predominately' rather than 'commonly' or 'regularly'. On the contrary, I consider that the meaning which best accords with the policy and the purposes of the TPA is that of 'commonly' or 'regularly'. I am conscious that the Full Court of the Victorian Supreme Court in ICI Australia Operations Pty Ltd v Deputy Commissioner of Taxation (Vic) (1987) 82 ATC 5110 said at 5112 that the concept of 'ordinarily used for' equals 'whose primary but not necessarily exclusive purpose and customary use is'. However, I do not agree that the word 'ordinarily' should be given such a connotation in s 74A(2)(a) or elsewhere in the TPA. 82 Secondly, it is preferable to pose the statutory question (ie the question whether the goods in issue in the particular case are goods of a kind ordinarily acquired for personal, domestic or household use or consumption) as a single composite question: see Clean Investments at 273 [91]-[93] per Lindgren J; Diethelm at 472 per Hill J; and Chubb at 559[F] per Burchett J. This can be contrasted with a two-stage inquiry as to, first, the genus of goods in question, and secondly, whether that kind of goods is ordinarily acquired for personal, domestic or household use or consumption. As Lindgren J pointed out in Clean Investments , posing the genus question separately as a threshold one runs the risk of prejudging the answer to the statutory question. His Honour said at 273 [92] [93]: 'In some cases it may be misleading to address separately the question of identification of the "genus" to which the particular goods in question belong, and the question whether that genus meets the description "ordinarily used for household purposes". The problem can be indicated by the question "What kind of goods is the Item speaking of?" Answering the genus question separately as a threshold one will assume, without making explicit, an answer to this question. Goods and purposes can be equally correctly described in different ways, in particular, broadly or narrowly, yet the description selected may dictate the answer to the statutory question. For example, an architect's stool, an office chair and a kitchen stool or chair may be described as "stools" or "chairs" and their purpose as being "to provide seating". Yet it would be wrong to conclude that the architect's stool or the office chair is of a kind ordinarily used for household purposes for no other reason than that, like the kitchen chair, it is ordinarily used for the purpose of providing seating.' French J drew attention to the same risk in Diethelm at 465: 'It cannot be enough to say that because some goods fall into a genus wide enough to encompass goods ordinarily used for household purposes, they are therefore "goods of a kind ordinarily used for household purposes". The mere fact that office chairs and domestic chairs both provide "seating", which in some applications is a household purpose, is not sufficient to establish that office chairs are of a kind ordinarily used for household purposes.' To my mind, the risk to which their Honours draw attention is a real one. I agree that it is preferable to pose the statutory question as a single composite question. On my reading, that was the course adopted by French J in Diethelm and, I think, by both Hill J and Tamberlin J in Chubb. 83 Thirdly, depending on the precise statutory question and the circumstances of the particular case, it will be relevant to inquire as to the essential character of the goods in question. In Diethelm , French J thought that the answer to the statutory inquiry depended critically on the essential character of the goods. Adopting what had been said by Gummow J in Hygienic Lily at 399, Hill J said that the question whether goods are of a particular kind was to be determined objectively, by reference to the nature, quality and adaptation of the goods in the class or genus in question. However, Hill J also expressed reservations about the essential character test, saying that the inquiry may be useful in some cases but in other cases it may suffer from a lack of precision: at 470. In Chubb , Burchett J doubted the usefulness of the essential character test: at 559. Hill J in Chubb looked beyond the essential character of the goods and took into account evidence that explained the attributes, the intended use and the cost of the goods; Tamberlin J adopted much the same approach as Hill J. In Clean Investments , Lindgren J said that the essential character test lacked sufficient precision to assist in answering the question whether the coin-operated washing machines under consideration in that case constituted goods of a kind ordinarily used for household purposes: at 273 [96]. Lindgren J added that there is a danger that the essential character test may serve simply to give an undeserved legitimacy to first impressions.