In finding that the cost of replacing an engine in a tug was a capital expenditure, Thurlow J. stated (at p. 1131) that "there is no continuous demand for replacement of the engine any more than there is continuous demand for replacement of the hull as a whole" and that the taxpayer's "trade has gained an advantage by the expenditure, in that the expenditure has provided an engine which makes the tug more reliable, keeps it more constantly in service, and enables it to earn greater revenue and at the same time avoids the abnormal repairs formerly required".
In addition, the expenditure was made "to replace a substantial portion of the capital asset rather than to renew some minor item" (at p. 1132).