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.