The taxpayer, which carried on business as a stock broker, was required to pay a fine to the T.S.E. as a result of one of its vice-presidents inducing other member firms to open up margin accounts in the names of clients of the taxpayer who subsequently were prosecuted in respect of their trading activities in the stock of a mining company.
After finding that the fines clearly were not "made" for an income-producing produce, Thurlow J. went on to find that they also were not "incurred" for an income-producing purpose given that the activity of the vice-president in introducing the clients to competitors of the taxpayer was not established to have promoted the taxpayer's business or otherwise to have occurred as part of the taxpayer's business.