Dreamtech International Pty Ltd v Commissioner of Taxation
Document type: Decision Impact Statement
Venue: Federal Court of Australia (VID 159 of 2010)
Judgment date: 25 August 2010
Date published: 22 December 2010
Decision outcome: Favourable

Summary of decision:
The issue in this case was whether or not a stretched Hummer vehicle was a "limousine" and, therefore, came within the definition of "car" in section 27-1 of the A New Tax System (Luxury Car Tax) Act 1999 (LCT Act).

Overview of facts:
The Administrative Appeals Tribunal found the following facts (although it is noted that Dreamtech disagreed with certain of the findings): • Dreamtech is a licensed motor vehicle dealer. It imported a Hummer H1 which had been stretched from its original 122.8 inch wheelbase to a 140 inch wheelbase. It weighed 5.82 tonnes and had a carrying capacity of 14 people, including the driver. Following importation, the applicant made some modifications to the vehicle in order to comply with the Australian standards. • Upon importation, the interior of the stretched Hummer included such features as leather-look seating, flashing lights, strobe lights under the seats, large ice buckets for holding alcoholic beverages, liquid crystal display screens, DVD player, built in sound system, polished stainless steel ceiling and fibre optic lights. • The price of the vehicle exceeded the LCT threshold. Dreamtech agreed that should the stretched Hummer be found to be a 'car' for LCT purposes, it would be subject to LCT. | • Dreamtech is a licensed motor vehicle dealer. It imported a Hummer H1 which had been stretched from its original 122.8 inch wheelbase to a 140 inch wheelbase. It weighed 5.82 tonnes and had a carrying capacity of 14 people, including the driver. Following importation, the applicant made some modifications to the vehicle in order to comply with the Australian standards. • Upon importation, the interior of the stretched Hummer included such features as leather-look seating, flashing lights, strobe lights under the seats, large ice buckets for holding alcoholic beverages, liquid crystal display screens, DVD player, built in sound system, polished stainless steel ceiling and fibre optic lights. • The price of the vehicle exceeded the LCT threshold. Dreamtech agreed that should the stretched Hummer be found to be a 'car' for LCT purposes, it would be subject to LCT. | Issue decided by the Tribunal | • The stretched Hummer was a 'limousine' and therefore a car within s 27-1 of the LCT Act. The Tribunal found that the ordinary meaning of the word 'limousine' is reasonably wide and referred to the common use of the term in colloquial speech. | • The stretched Hummer was a 'limousine' and therefore a car within s 27-1 of the LCT Act. The Tribunal found that the ordinary meaning of the word 'limousine' is reasonably wide and referred to the common use of the term in colloquial speech. | Issues decided by the Full Court | • The Tribunal gave the word 'limousine' its ordinary meaning and took into account all relevant considerations. The Tribunal considered both whether the vehicle was a motor vehicle and a limousine before correctly making a finding that the vehicle was a car for the purposes of s27-1 of the LCT Act. Further, the Tribunal gave due consideration to Dreamtech's arguments that the vehicle is similar to a bus and is defined to be a heavy vehicle under the Australian Design Rules. • The construction of the definition of 'limousine' is a question of law; however, whether a particular vehicle falls within the definition of 'limousine' is a question of fact. | • The Tribunal gave the word 'limousine' its ordinary meaning and took into account all relevant considerations. The Tribunal considered both whether the vehicle was a motor vehicle and a limousine before correctly making a finding that the vehicle was a car for the purposes of s27-1 of the LCT Act. Further, the Tribunal gave due consideration to Dreamtech's arguments that the vehicle is similar to a bus and is defined to be a heavy vehicle under the Australian Design Rules. • The construction of the definition of 'limousine' is a question of law; however, whether a particular vehicle falls within the definition of 'limousine' is a question of fact.

Issues decided:
• The stretched Hummer was a 'limousine' and therefore a car within s 27-1 of the LCT Act. The Tribunal found that the ordinary meaning of the word 'limousine' is reasonably wide and referred to the common use of the term in colloquial speech. • The stretched Hummer was a 'limousine' and therefore a car within s 27-1 of the LCT Act. The Tribunal found that the ordinary meaning of the word 'limousine' is reasonably wide and referred to the common use of the term in colloquial speech. | Issues decided by the Full Court: • The Tribunal gave the word 'limousine' its ordinary meaning and took into account all relevant considerations. The Tribunal considered both whether the vehicle was a motor vehicle and a limousine before correctly making a finding that the vehicle was a car for the purposes of s27-1 of the LCT Act. Further, the Tribunal gave due consideration to Dreamtech's arguments that the vehicle is similar to a bus and is defined to be a heavy vehicle under the Australian Design Rules. • The construction of the definition of 'limousine' is a question of law; however, whether a particular vehicle falls within the definition of 'limousine' is a question of fact. • The Tribunal gave the word 'limousine' its ordinary meaning and took into account all relevant considerations. The Tribunal considered both whether the vehicle was a motor vehicle and a limousine before correctly making a finding that the vehicle was a car for the purposes of s27-1 of the LCT Act. Further, the Tribunal gave due consideration to Dreamtech's arguments that the vehicle is similar to a bus and is defined to be a heavy vehicle under the Australian Design Rules. • The construction of the definition of 'limousine' is a question of law; however, whether a particular vehicle falls within the definition of 'limousine' is a question of fact.

ATO view of decision:
The decision confirms the ATO's view of the attributes that are to be taken into account when determining whether or not a vehicle is a limousine.

Administrative treatment:
None - the case confirms the ATO view.

Legislative references: A New Tax System (Luxury Car Tax) Act 1999 25-1 27-1 A New Tax System (Indirect Tax and Consequential Amendments) Act (No 2) 1999
Case references: Deputy Commissioner of Taxation v ICI Australia Operations Pty Ltd (1987) 18 ATR 313 87 ATC 4069 Falkiner v Whitton [1917] AC 106 22 CLR 324 Metropolitan Gas Co v Federated Gas Employees' Industrial Union (1924) 35 CLR 449 31 ALR 117 Seay v Eastwood [1976] 1 WLR 1117 [1976] 3 All ER 153 Adams v Rau (1931) 46 CLR 572 38 ALR 87 Baxter Healthcare Pty Limited v Comptroller-General of Customs (1997) 72 FCR 467 Brutus v Cozens [1973] AC 854 Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280 115 ALR 1 Commissioner of Taxation v Murray (1990) 21 FCR 436 21 ATR 78 90 ATC 4182 Ergon Energy Corporation Ltd v Commissioner of Taxation [2006] FCAFC 125 153 FCR 551 64 ATR 130 Hope v Bathurst City Council [1980] HCA 16 144 CLR 1 12 ATR 231 80 ATC 4386 NSW Associated Blue-Metal Quarries Limited v Federal Commissioner of Taxation [1956] HCA 80 94 CLR 509 Peacock v Zyfert (1983) 48 ALR 549 77 FLR 47 Price Street Professional Centre Pty Ltd v Commissioner of Taxation [2007] FCAFC 154 243 ALR 728 2007 ATC 5044 67 ATR 544 Sharp Corporation of Australia Pty Ltd v Collector of Customs (1995) 59 FCR 6 22 AAR 35
Subject references: Taxation luxury car tax whether stretched Hummer within the definition of 'car' in the A New Tax System (Luxury Car Tax) Act 1999 (Cth) whether construction of the word 'limousine' was a question of fact or a question of law within s 44(1) of the AAT Act.