FAUTEUX,
J.
(all
concur)
:—This
is
an
appeal
from
a
judgment
of
the
Exchequer
Court
of
Canada,
pronounced
by
the
learned
President
of
the
Court,
on
March
16,
1966,
whereby
he
allowed
an
appeal
by
respondent
from
assessments
made
under
the
Income
Tax
Act,
for
the
1960,
1961
and
1962
taxation
years.
The
circumstances
giving
rise
to
the
question
to
be
determined
in
this
appeal
can
be
summarized
as
follows:
In
July
1960,
respondent,
in
order
to
improve
its
transportation
business,
arranged,
with
Franc.
R.
Joubin
&
Associates
Mining
Geologists
Limited,
hereafter
referred
to
as
the
Joubin
company,
for
a
broad
general
geological
survey,
over
a
period
of
five
years,
of
the
mineral
possibilities
of
a
section
of
the
unpopulated
land
through
which
respondent’s
railway
ran
in
the
province
of
Ontario,
and
which
is,
essentially,
either
Crown
land
or
respondent’s
property.
This
arrangement
was
made
with
the
declared
intention
of
making
the
information
arising
from
the
survey
available
to
interested
members
of
the
public,
in
the
hope
and
expectation
that
it
would
lead
to
development
of
the
area
(possible
mines,
secondary
industry,
etc.)
that
would
produce
traffic
for
respondent’s
transportation
system.
Consequent
to
this
arrangement,
the
amounts
admittedly
paid
by
respondent
to
the
Joubin
company
are
$43,603.40
in
respect
of
1960,
$85,189.06
in
respect
of
1961
and
$138,369.41
in
respect
of
1962.
The
question
is
whether
these
amounts
are
deductible
in
computing
respondent’s
profits
from
its
business
for
those
respective
years.
More
precisely,
the
issue
is
whether,
as
contended
for
by
appellant
and
successfully
disputed
by
respondent,
in
the
court
below,
these
expenditures
are
outlays
‘‘of
capital”
or
payments
“on
account
of
capital”,
within
the
meaning
of
those
expressions
in
Section
12(1)
(b)
of
the
Income
Tax
Act
and,
as
such,
not
deductible
in
computing
the
profits
of
the
respondent’s
business.
Parliament
did
not
define
the
expressions
‘‘outlay
.
.
.
of
capital”
or
“payment
on
account
of
capital’’.
There
being
no
statutory
criterion,
the
application
or
non-application
of
these
expressions
to
any
particular
expenditures
must
depend
upon
the
facts
of
the
particular
case.
We
do
not
think
that
any
single
test
applies
in
making
that
determination
and
agree
with
the
view
expressed,
in
a
recent
decision
of
the
Privy
Council,
B.P.
Australia
Ltd.
v.
Commissioner
of
Taxation
of
the
Commonwealth
of
Australia,
[1966]
A.C.
224,
by
Lord
Pearce.
In
referring
to
the
matter
of
determining
whether
an
expenditure
was
of
a
capital
or
an
income
nature,
he
said,
at
p.
264
:
The
solution
to
the
problem
is
not
to
be
found
by
any
rigid
test
or
description.
It
has
to
be
derived
from
many
aspects
of
the
whole
set
of
circumstances
some
of
which
may
point
in
one
direction,
some
in
the
other.
One
consideration
may
point
so
clearly
that
it
dominates
other
and
vaguer
indications
in
the
contrary
direction.
It
is
a
commonsense
appreciation
of
all
the
guiding
features
which
must
provide
the
ultimate
answer.
The
learned
President,
after
considering
all
the
facts
in
the
present
case,
decided
that
the
expenditures
in
issue
were
not
of
a
capital
nature
within
the
provisions
of
Section
12(1)
(b)
of
the
Income
Tax
Act.
We
agree
with
his
conclusion.
Hence,
the
appeal
should
be
dismissed
with
costs.
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