British Insulated and Helsby Cables Ltd V Atherton

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AC 205

[¶10-090/1] British Insulated and Helsby Cables Ltd v Atherton

(1926) AC 205

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Viscount Cave LC said (at pp 211–212):

“My Lords, I think it clear that the deduction from the profits of the above mentioned sum of £31,784

is not prohibited by the first rule applicable to Cases I and II, which prohibits the deduction of a

disbursement not being money wholly and exclusively laid out or expended for the purposes of the

trade. It was made clear in the above cited cases of Usher’s Wiltshire Brewery v. Bruce (1915) A.C.

433 and Smith v. Incorporated Council of Law Reporting for England and Wales (1914) 3 K.B. 674

that a sum of money expended, not of necessity and with a view to a direct and immediate benefit

to the trade, but voluntarily and on the grounds of commercial expediency, and in order indirectly to

facilitate the carrying on of the business, may yet be expended wholly and exclusively for the purposes

of the trade; and it appears to me that the findings of the Commissioners in the present case bring

the payment in question within that description. They found (in words which I have already quoted)

that the payment was made for the sound commercial purpose of enabling the company to retain

the services of existing and future members of their staff and of increasing the efficiency of the staff;

and after referring to the contention of the Crown that the sum of £31,784 was not money wholly and

exclusively laid out for the purposes of the trade under the rule above referred to, they found that the

deduction was admissible — thus in effect, although not in terms, negativing the Crown’s contention. I

think that there was ample material to support the findings of the Commissioners, and accordingly that

this prohibition does not apply.”

Last reviewed: 3 October 2014

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