Commissioner of Taxation v Pine Creek Goldfields Ltd [1999] FCA 1267

FEDERAL COURT OF AUSTRALIA

Commissioner of Taxation v Pine Creek Goldfields Ltd [1999] FCA 1267

INCOME TAX – taxpayer engaged in goldmining operations in the Northern Territory – covenant in the mineral lease prevented the taxpayer from mining on, or obstructing, any road on the leased land unless the taxpayer had constructed an alternative road over a route to a standard acceptable to the Minister - taxpayer incurred expenditure on the design, corridor acquisition and construction costs of a diversion of the Stuart Highway which ran adjacent to the open-cut mining pit on the leased land – relocation of the highway enabled the taxpayer to access mineral reserves otherwise inaccessible – whether taxpayer was entitled to deduct the expenditure under s 51(1) of the Income Tax Assessment Act 1936 (Cth) ("the Act") – whether the expenditure was of a capital nature – whether taxpayer was entitled to deduct the expenditure under Division 10 of Part III of the Act – whether expenditure was "allowable capital expenditure" as defined in s 122A of the Act Income Tax Assessment Act 1936 (Cth) ss 51(1), 122(1), 122A(1)(a), 122DG Inland Revenue Commissioners v British Salmson Aero Engines Ltd [1938] 2 KB 482, cited Hallstroms Pty Ltd v Federal Commissioner of Taxation (1946) 72 CLR 634, cited GP International Pipecoaters Pty Ltd v Federal Commissioner of Taxation (1990) 170 CLR 124, applied BP Australia Pty Ltd v Federal Commissioner of Taxation (1965) 112 CLR 386, applied Sun Newspapers Ltd v Commissioner of Taxation (Cth) (1938) 61 CLR 337, applied BP Australia Ltd v Commissioner of Taxation (Cth) [1966] AC 224, cited Alianza Co Ltd v Bell [1906] AC 18, cited Nizich v Commissioner of Taxation (Cth) (1991) 91 ATC 4,747, cited Kauri Timber Co Ltd v Commissioner of Taxes (NZ) [1913] AC 771, cited Golden Horse Shoe (New) Ltd v Thurgood [1934] 1 KB 548, cited Knight v Calder Grove Estates (1954) 35 TC 447, cited Stow Bardolph Gravel Co Ltd v Poole [1954] 3 All ER 637, cited HJ Rorke Ltd v Inland Revenue Commissioners (1960) 39 TC 194, cited British Insulated & Helsby Cables Ltd v Atherton [1926] AC 205, referred to Strick v Regent Oil Co Ltd [1966] AC 295, considered Cliffs International Inc v Commissioner of Taxation (Cth) (1979) 142 CLR 140, considered Herring v Commissioner of Taxation (Cth) (1946) 72 CLR 543, considered Denison Mines Ltd v Minister of National Revenue (1974) 49 DLR (3rd) 450, considered Commissioner of Taxation v Mount Isa Mines Ltd (1991) 28 FCR 269, discussed Re Addie & Sons (1875) 2 SC 431, cited Coltness Iron Co v Black (1881) 6 App Cas 315, cited Mallett v Staveley Coal & Iron Co Ltd [1928] 2 KB 405, considered Mount Isa Mines Ltd v Federal Commissioner of Taxation (1992) 176 CLR 141, discussed Robert Addie & Sons' Collieries Ltd v Inland Revenue Commissioners [1924] SC 231, considered United Collieries Ltd v Inland Revenue Commissioners [1930] SC 215, considered Bean v Doncaster Amalgamated Collieries Ltd (1944) 171 LT 214, considered Doncaster Amalgamated Collieries Ltd v Bean [1946] 1 All ER 642, cited Utah Development Co v Commissioner of Taxation (Cth) (1975) 5 ALR 474, considered Commissioner of Taxation (Cth) v Utah Development Co (1976) 9 ALR 660, referred to Cyprus Mines Corporation v Commissioner of Taxation (Cth) (1978) 22 ALR 322, considered Johns-Manville Canada Inc v The Queen (1985) 21 DLR (4th) 210, distinguished Tucker v Granada Motorway Services Ltd [1979] 1 WLR 683, applied Robe River Mining Co Pty Ltd v Commissioner of Taxation (Cth) (1989) 21 FCR 1, cited Commissioner of Taxation (Cth) v Broken Hill Pty Co Ltd (1969) 120 CLR 240, applied QCT Resources Ltd v Commissioner of Taxation (Cth) (1997) 97 ATC 4,432, cited