Collins & Spencer
HISTORY is full of examples of great thinking that has helped solve life's mysteries. For example, seeing an apple fall inspired Isaac Newton to formulate his law of universal gravitation.
Australia's legal system, along with the Tax Office, has been similarly engaged in the past year, but the mystery that has gone before the Federal Court won't leave the same kind of legacy as Newton did. It has been asked to decide if a Hummer is a luxury car.
This goes back to 2008, when the Tax Office issued Melbourne company Dreamtech International with a $22,000 luxury car tax (LCT) bill for importing a Hummer from the US, which it then converted into a 14-passenger limousine.
For readers who don't watch Top Gear, a Hummer is a US military vehicle that, adapted to civilian life, transports teenagers to school dances, takes drunken men on buck's nights and appears in the occasional rap video. They use so much petrol that a picture of a Hummer once appeared on the cover of a US newspaper under the headline Axles of Evil.
Dreamtech is the biggest builder of limousines in Australia, producing about 25 a year, including stretch Hummers.
No written guidelines exist regarding limos and LCT but, due to their size, weight and the number of passengers that can be transported, most are registered as buses in NSW and Victoria.
In the absence of a luxury bus tax, Dreamtech didn't bother collecting LCT on the vehicles it has sold in the past 14 years.
The Tax Office disagreed, and hit it with a $22,000 bill for unpaid LCT for one Hummer. Dreamtech, facing the prospect of hundreds of thousands of dollars of back taxes, decided to fight.
The first port of call was the Administrative Appeals Tribunal, and there began the search for the Hummer's identity. Counsel for Dreamtech argued that a Hummer wasn't liable for LCT as it was a bus. They also argued that the inside of a stretch Hummer was not the most luxurious place to spend a Saturday night.
On that point, the tribunal agreed. It found, among other things, that a stretch Hummer was ''noisy'', ''provides limited headroom for seated passengers'', that ''passengers' knees are higher than hip level when they are seated, resulting in reduced comfort'' and ''the tribunal considered the Hummer rather cramped inside''.
But beauty is in the eye of the beholder. The tribunal noted: ''I seriously doubt that any passenger would notice engine noise with a sound system battering the eardrums at very high decibel outputs. The fact that it is rather cramped inside and the ride may be rather firm would, I believe, not even be noticed by the types of persons attracted to use the services of this kind of vehicle.
''The interior of the Hummer features black vinyl seat coverings, flashing lights and strobe lights under the seats, and a reflective polished metal roof containing small multicoloured lights described as disco lights.''
So, do disco lights maketh the luxury car? Apparently so, especially when a brochure that stated the Hummer would make a passenger "feel like the toast of the town" and "a Hollywood movie star" was considered.
The tribunal concluded the Hummer limo was a luxury car as it was ''indisputably large and would be considered luxurious by the young people who form the market for the vehicle''.
The tribunal found: ''It has all the characteristics which young people would, in my opinion, find luxurious. That is, luxuriously styled seating covered with black vinyl, ice buckets and glasses for drinking, a DVD player and screens, no doubt to play music videos at very loud sound levels. In addition, it has a reflective polished metal interior roof fitted with what can only be described as disco lights.
''It is not difficult to accept that these features are attractive to young people who would see them as luxurious despite the fact that some of us, who have reached a certain age, would not necessarily agree.''
Unperturbed, Dreamtech took its case to the Federal Court before Justice Susan Kenny. She agreed with the tribunal - the Hummer was a luxury car.
''Nothing advanced by Dreamtech supports the conclusion that the tribunal misconstrued the LCT Act in finding that the Hummer is a limousine within the meaning of that provision,'' Justice Kenny said. ''Dreamtech's appeal under the Administrative Tribunal Appeals Act 1975 should be dismissed, with costs.''
Dreamtech is considering a further appeal.
