Re Commissioner of Taxation v Robert John Cooper [1991] FCA 164; 91 Atc 4396 21 Atr 1616/99 ALR 703 29 FCR 177 (24 April 1991)






No. G411 of 1990

FED No. 190

Income Tax

[1991] FCA 164; 91 ATC 4396

21 ATR 1616/99 ALR 703

[1991] FCA 164; 29 FCR 177





Lockhart(1), Wilcox(2) and Hill(3) JJ.


Income Tax - Section 51(1) Income Tax Assessment Act - losses or outgoings incurred in gaining or producing assessable income - loss or outgoing of private or domestic nature - professional rugby league player - extra food consumed to maintain weight.

Income Tax Assessment Act: s. 51(1).




Counsel and Solicitors D.H. Bloom QC and B.J. Sullivan

for appellant: instructed by the Australian

Government Solicitor

Counsel and Solicitors R.F. Edmonds instructed by

for respondent: David Brown and Partners


The appeal be allowed.

The respondent, Robert John Cooper, pay the costs of the appellant, Commissioner of Taxation, of the appeal.

The orders made by the Supreme Court be set aside.

The appeal to the Supreme Court by the Commissioner of Taxation be allowed.

Leave be reserved to either party to restore the matter to the list on seven days' notice on the question of costs of the appeal to the Supreme Court.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.


The taxpayer, Robert John Cooper, is a professional footballer who played with the Western District Rugby League Football Club. He claimed as deductions under s. 51(1) of the Income Tax Assessment Act 1936 ("the Act") the expenditure incurred by him for the purchase of additional food and drink which he consumed, on the "instructions" of his coach, in order to maintain an "optimum playing weight" of about 16 stone and thus retain his strength to break the opponents' defensive line in First Grade Rugby League Football. He played with the Club as a forward.

2. The Commissioner of Taxation disallowed the deductions claimed by the taxpayer for the cost of the additional food for the years ended 30 June 1980, 1981 and 1982. The taxpayer objected to the disallowance and the objections were referred to a Taxation Board of Review which allowed the taxpayer's objections. The Commissioner appealed to the Supreme Court of New South Wales. The appeal was heard by Hunt J. who dismissed the appeal. The Commissioner appealed to this Full Court from the Supreme Court's judgment.

3. Hunt J. dismissed the Commissioner's appeal on two grounds. First, his Honour held that the appeal was incompetent because it involved no question of law. His Honour said that no question of law is involved where some principle of law was either necessarily applied by the Board in arriving at its decision or merely implicit or assumed in that position; the question must be one which was involved in the Board's decision and he referred to Boyded (Holdings) Pty Limited v Federal Commissioner of Taxation (1982) 13 ATR 127 at 130. His Honour found that there was no question of law involved in the Board's decision in this case. He said the question whether a particular set of facts comes within the terms of a statutory definition which uses words according to their common understanding is one of fact not of law and referred to Australian Gas Light Co. v Valuer-General (1940) 40 SR(NSW) 126 at 137-8 and Hope v Bathurst City Council [1980] HCA 16; (1980) 144 CLR 1 at 7-8. His Honour noted a concession in argument that the case involved a question of fact and degree (Federal Commissioner of Taxation v Forsyth [1981] HCA 15; (1981) 148 CLR 203 at 215), that no submission was made to the Board of "no evidence" and that the Board did not rule upon that question expressly or by implication: cf Lombardo v Federal Commissioner of Taxation (1979) 10 ATR 310 at 314.

4. The second ground on which his Honour dismissed the Commissioner's appeal was that the food and drink purchased by the taxpayer was additional to that which he ordinarily consumed; that it was consumed, not to sustain the taxpayer because his ordinary consumption of food did that, but to ensure that he was able to derive a substantially greater income from that which he would otherwise have been able to derive because payments made to First Grade players are considerably higher than those made to players of lower grades. His Honour found that the outgoing was directly related to gaining that additional assessable income and that the essential character of the expenditure was to gain additional assessable income. His Honour relied on Lunney v Federal Commissioner of Taxation [1958] HCA 5; (1958) 100 CLR 478 at 497 and held that the expenditure was incurred pursuant to a contractual obligation to do so and not merely because the taxpayer had been "encouraged" to incur it, as the Commissioner contended. His Honour compared Federal Commissioner of Taxation v Hatchett [1971] HCA 47; (1971) 125 CLR 494 at 499. He held that the claim was a deduction allowable under the first limb of s. 51(1) of the Income Tax Assessment Act (1936) as expenditure incurred in gaining the taxpayer's assessable income.

5. The evidence before the Supreme Court consisted of the evidence given to the Board of Review (including oral evidence of the taxpayer), which was tendered by consent, two additional affidavits of the taxpayer and certain brief oral evidence of the taxpayer. Hunt J. accepted the taxpayer's evidence in its entirety.

6. I shall briefly state the relevant facts. The taxpayer was during the relevant years of income under a contract with the Western District Rugby League Football Club, made on 22 December 1979, to play for it in the Sydney Major Premiership Competition during the 1980 and 1981 seasons together with a "club option" for the 1982 season. Under the contract the taxpayer agreed (by clause 1) to:

"... do everything necessary to get and keep

himself in the best possible condition so as to

render the most efficient service to the Club

and will carry out all the training and other

instructions of the Club through its responsible


7. The contract gave to the Club the right to determine the contract forthwith if the taxpayer failed to discharge his obligations or if he was guilty of disobedience (clause 7). He was entitled to a "signing on" fee of $9,000 for seasons 1980 and 1981". Additional payments were to be made to him for each match, which varied in amount according to the particular grade in which he played and the results of each match (clause 3). A win when playing in First Grade paid five times the amount for a win in Reserve Grade. Substantial additional payments were to be made if the taxpayer was chosen to represent Australia or New South Wales.

8. When the taxpayer commenced playing in First Grade (some years before the first of the relevant years of income) he noticed that he lost weight from the beginning of the pre-season training which continued throughout the season. This coincided with the increased time which he was obliged to spend on training. He trained with the team three nights a week and he tried to train by himself on a further two nights a week. He found that after commencing at 17 stone, he would finish the season just under 15 stone. This weight loss affected the taxpayer's ability as a forward. It resulted in loss of strength which in turn diminished his ability to break the opposing team's defence line. That was the task expected of him, and such ability was important to his effectiveness as a forward and to the retention of his position in First Grade. His Honour found that if the taxpayer's ability to barge through his opponent's defensive line was reduced because of his loss of weight the taxpayer would have been dropped from First Grade (he was never in fact dropped from First Grade) and if he was so dropped his income derived as a professional footballer would be reduced by 80 percent until he was promoted back into First Grade if and when this were to happen. His Honour found that the loss of weight would accordingly have been directly responsible for the reduction in assessable income derived by the taxpayer as a professional footballer.

9. On 12 October 1979 the taxpayer's coach gave him the following "instructions" in writing:

" 12 October 1979

Mr R Cooper

3 Yara Close


Dear Bob,

Now that the season has ended and in

preparation for next year's season I would like

you to follow the instructions below from this



Ensure that you maintain your reflex speed

and endurance by playing squash at least once,

preferably twice per week, all year round.


Attend a Gym, either locally or at Wests

League Club, to build up your physique and

strength, preferably once per week.


As you have a tendency to lose weight

which affects your playing ability during the

season, I want you to eat the following items

each week in addition to your normal meals:

1. 3 kilos of steak, only medium


2. Potatoes at each meal, 1 kilo per


3. Bread at each meal, at least three

loaves per week.

4. Beer is an excellent method of

increasing weight, therefore at

least 1 dozen cans per week.

5. At least one glass of Sustagen per


General Exercise:

Ensure that for general conditioning you

do as much running as possible.

I appreciate that the above will involve

you in extra expense but I am sure that you will

be recompensed by the Club when your contract

comes up for renewal.



10. The taxpayer gave evidence before the Board that he understood he was under an obligation to do what Mr Masters said.

11. The taxpayer made estimates of the cost of the purchase of the additional food and drink consumed by him to carry out the instructions and they were $682, $751 and $640 for the three years of income respectively. The estimates were not challenged as to quantum by the Commissioner. The taxpayer was unable to relate specific amounts of money to the steak, potatoes, bread, beer and Sustagen purchased in addition to that which would otherwise have been purchased....

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