B.W. Noble, Ltd. v. Mitchell (1927), 11 TC 372 (CA) -- summary under Contract or Option Cancellation

Although the taxpayer, which was an insurance and reinsurance broker, had cause to dismiss one of its directors, and to require him to transfer his valuable shares to the other directors for their nominal par value, the taxpayer did not dismiss him in order to avoid the possibility of public scandal. A substantial sum which the taxpayer agreed to pay to the director in five annual instalments in order to secure his retirement was found not to be a capital expenditure for purposes of Rule 3(f). The payments were made not to secure an actual asset but in order to avoid a detriment to the continued conduct of its existing trade, and they did not have a once-and-for-all character because they in no way ensured that a similar incident would not occur in the future.