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Published online by Cambridge University Press: 24 January 2025
(1965) 39 A.L.J.R. 190.
2 Lord Reid, Lord Morris of Borth-y-Gest, Lord Pearce, Lord Upjohn and Lordi Wilberforce. Judgment delivered by Lord Pearce.
3 (1961) 8 A.I.T.R. 263.
4 (1964) 9 A.I.T.R. 225.
5 McTiernan, Windeyer and Owen JJ. (Dixon C.J. and Kitto J. dissenting).
6 (1964) 9 A.I.T.R. 225, 235.
7 (1964) 9 A.I.T.R. 237.
8 Ibid. 243.
9 (1964) 9 A.I.T.R. 225, 230.
10 Ibid. 232: ‘What in truth happened in August 1951 was that an era began in which continuing competition among oil companies for blocks of orders, each block consisting of the whole of the orders from a service station in a period would be a permanent feature of the trade.’
11 (1965) 39 A.L.J.R. 190, 194: ‘As each new case comes to be argued felicitous phrases from earlier judgments are used in argument by one side and the other. But those phrases are not the deciding factor, nor are they of unlimited application. They merely crystallise particular factors which mayincline the scale in a particular case after a balance of all the considerations has been taken.’
12 [1925] A.C. 205; [1925] All E.R. 623, 629; ‘But when an expenditure is made, not entirely once and for all, but with a view to bringing into existence an asset or an advantage for the enduring benefit of a trade I think that there is a very good reason (in the absence of special circumstances leading to the opposite conclusion) for treating such an expenditure as properly attributable not to revenue but to capital ’. Per Viscount Cave.
13 [1925] All E.R. 623, 630.
14 Ibid. 634.
15 (1938) 61 C.L.R. 337, 363: ‘There are, I think three matters to be considered, (a) the character of the advantage sought, and in this its lasting qualities may playa part, (b) the manner in which it is to be used, relied upon or enjoyed and in this and under the former head recurrence may playits part, and (c) the means adopted to obtain it, that is by providing a periodical reward or outlay to cover its use or enjoyment for periods commensurate with the payment or by making a final provision or payment so as to secure future use or enjoyment.’
16 W. Nevill and Co. Ltd v. Federal Commissioner of Taxation (1937) 56 C.L.R. 290.
17 Anglo-Persian Oil Co. Ltd v. Dale [1932] 1 K.B. 124; [1931] All E.R. 725.
18 Stow Bardolph Gravel Co. Ltd v. Poole (1954) 34 Tax Cas. 459; [1954] 3 All E.R. 637.
19 [1931] All E.R. 725, 735.
20 H. J. Rorke Ltd v. Inland Revenue Commissioners (1960) 39 Tax Cas. 194: [1960]3 All B.R. 359.
21 Mitchell v. B. W. Noble Ltd [1927] I K.B. 719; [1927] All E.R. 717.
22 (1959) 101 C.L.R. 30.
23 Ibid. 42.
24 Ibid. 48. Per Menzies J.: ‘To make a payment to acquire or to defend the aquisition of a favourable position from which to earn income or to enter into arrangements that will yield income is not in general an outlay incurred either in gaining or in carrying on business for the purpose of gaining assessable income … To be deductible an outlay must be part of the cost of trading operation to produce income’.
25 Sun Newspapers Ltd v. Federal Commissioner of Taxation (1938) 61 C.L.R. 337. UnitedSteel Co. Ltd v. Cullington (No.2) (1939) 23 Tax Cas. 71. Collins v. Joseph Adamson [1938] K.B. 477. Associated Portland Cement Manufacturers Ltd v. Inland Revenue Commissioners (1946) 27 Tax Cas. 103. Van Der Berghs Ltd v. Clark [1935] A.C. 431.
26 (1965) 39 A.L.J.R. 190, 194.
27 Mitchell v. Noble [1927] 1 K.B. 719; W. Nevill & Co. Ltd v. Federal Commissioner of Taxation (1936-1937) 56 C.L.R. 290; Smith v. Incorporated Council of Law Reporting [1914] 3 K.B. 674; Hancock v. General Reversionary #x0026; Investment Co . [1919] 1 K.B. 25.
28 British Insulated & Helsby Cables v. Atherton [1926] A.C. 205.
29 Hinton v. Maden & Ireland (1959) 38 Tax Cas. 391.
30 [1921] 2 A.C. 13.
31 (1954) 35 Tax Cas. 194; [1954] 3 All E.R. 637.
32 Sir Raymond Evershed M.R.: Jenkins and Birkett L.JJ.
33 (1960) 39 Tax. Cas. 194: [1960] 3 All E.R. 359.
34 (1960) 3 All E.R. 359, 366.
35 (1965-1966) 39 A.L.J.R. 190, 197.
36 [1964] A.C. 948.
37 (1965) 39 A.L.J.R. 190, 197.
38 (1956) 37 Tax. Cas. 56.
39 [1965] A.C. 433.
40 (1938) 61 C.L.R. 337 :—Moneys paid by the taxpayer to prevent the emergence of a competitive newspaper were held capital. In essence this was regarded as adding a right to the goodwill.
41 (1946) 72 C.L.R. 634:—Moneys paid by the taxpayer to prevent a competitor from extending a patent on goods were held revenue expenditure, being the gain of a common not an exclusive right. Dixon J. dissented, holding at 646: ‘ The purpose of expending the money upon the opposition proceedings was to enable the taxpayer company to complete and carry into effect plans for re-organising its manufacturin and selling business for the production and sale of an entirely different refrigerator. This appears to me to go to the character and organisation of the profit earning business and not to be an incident in the operations by which it is carried on ’.
42 (1952) 85 C.L.R. 423—The taxpayer expended money to prevent a competitor from becoming established. Held that expenditure for the purpose of preserving and protecting the nature of the con1pany's business, i.e. a monopoly, was capital expenditure.
43 (1959) 101 C.L.R. 30:— The taxpayer was put to expense defending a suit attacking its title to shares acquired in a competitor. Held that this was protecting and so incidental to, the acquisition of an asset. It was not a part of trading operations.
44 Southern v. Borax Consolidated Ltd (1940) 23 Tax. Cas. 597. (1940) 4 All E.R. 412: An asset was purchased for taxpayer's business. It defended a challenge to its title. Lawrence J. held that the expenditure did not alter or add to any capital asset and so was revenue expenditure. This decision was affirmed in Morgan v. Tate & Lyle Ltd (1954) 35 Tax Cas. 367; (1954) 2 All E.R. 413. The taxpayer conducted a campaign against nationalisation of its assets. The cost thereof was held revenue expenditure. Lord Morton said: ‘I can see no distinction between a payment made to preserve the status and dividend earning power of the company and a payment made to prevent seizure of the companies profit earning assets.’ ((1954) 2 All E.R. 413, 418). Lord Keith, however, dissented holding that such a distinction was necessary (see p. 435).
45 [1954] 2 All E.R. 413, 434 per Lord Keith.
46 B.P. Australia Ltd v. F.C.T. (1964) 9 A.I.T.R. 225, 230.
47 (1964) 9 A.I.T.R. 237.
48 (1957) 21 S.Af. T.C. 203.
49 (1946) 72 C.L.R. 634, 646.