Atherton v British Insulated and Helsby Cables Ltd

JurisdictionUK Non-devolved
JudgeLord Blanesburgh,Lord Buckmaster,Lord Shaw of Dunfermline,Lord Dunedin,Viscount Haldane,The Lord Chancellor,Lord Atkinson,Lord Carson
Judgment Date11 December 1925
Judgment citation (vLex)[1925] UKHL J1211-2
CourtHouse of Lords
Date11 December 1925
Charlesworth, Peebles and Company
British Thomson-Houston Company, Limited;
British Thomson-Houston Company, Limited
British Insulated and Helsby Cables, Limited.

[1925] UKHL J0203-1

Viscount Haldane.

Lord Dunedin.

Lord Shaw.

Lord Buckmaster.

Lord Blanesburgh.

House of Lords

After hearing Counsel for the Appellants, as well on Monday the 1st, as Monday the 15th, Tuesday the 16th and Thursday the 18th, days of December last, upon the Petition and Appeal of the British Thomson-Houston Company, Limited, whose Registered Office is situate at Crown House, Aldwych, in the County of London, praying, That the matter of the Order set forth in the Schedule thereto, namely, an Order of His Majesty's Court of Appeal, of the 2d of June 1924, might be reviewed before His Majesty the King, in His Court of Parliament, and that the said Order might be reversed, varied, or altered, or that the Petitioners might have such other relief in the premises as to His Majesty the King in His Court of Parliament might seem meet; as also upon the printed Case of British Insulated and Helsby Cables, Limited, lodged in answer to the said Appeal; and Counsel appearing for the Respondents, but not being called on; and due consideration being had this day of what was offered for the said Appellants in this Cause:

It is Ordered and Adjudged, by the Lords Spiritual and Temporal in the Court of Parliament of His Majesty the King assembled, That the said Order of His Majesty's Court of Appeal, of the 2d day of June 1924, complained of in the said Appeal, be, and the same is hereby, Affirmed, and that the said Petition and Appeal be, and the same is hereby, dismissed this House: And it is further Ordered, That the Appellants do pay, or cause to be paid, to the said Respondents, the Costs incurred by them in respect of the said Appeal, the amount thereof to be certified by the Clerk ot the Parliaments.

Lord Blanesburgh .

My Lords,


I am in such entire accord with the motion which has been made from the Woolsack, that I hardly venture to address to your Lordships supplementary observations on any part of the case. If I do deal for a little with the construction and intent of the so-called "warning passage" in the specification of 1906, it is only because the true effect of that passage, material in any aspect of the problem presented to the House, is, on one view of it, decisive of these Appeals. It is "the big question in the case" as, in the course of the English proceedings, Russell, J. observed. The issue of subject matter in the patent of 1909, to which nearly all the energies of Counsel have been directed, is really decided against the patentees, if the view of the passage presented by their opponents be accepted. The Dean of Faculty was, I think, entirely right when he said, that if the specification of 1906 disclosed to competent persons a process for the manufacture of a tungsten filament fit for use in an incandescent electric lamp, there was no room for invention in the patent of 1909. And the question whether such disclosure is or is not there made depends in the last analysis upon the true meaning of the warning passage. If, as is now contended by the patentees, it contains a direction that in rolling you must never permit the tungsten to exceed a dull red heat, then admittedly no tungsten filament can be produced by following the process described in the specification. But if the truth be, as is contended by their opponents that the passage properly understood in no way refers to dull red as being the heat sufficient for rolling—the indicated proper heat being one indefinitely higher than dull red—then it is, in my judgment, established that by attention on the part of competent persons to the directions contained in the 1906 specification tungsten filaments have been and can be produced.


It is perhaps convenient once again to set forth the passage in question in its entirety.

"As previously stated, tungsten must be hot when rolled and in order that there may be no danger of cracking the tungsten while it is being handled we prefer to heat both rolls and tungsten while the rolling operation is being carried out. If overheating is avoided it is possible to do this work in the open air, for up to dull red the oxidation of compact metallic tungsten is very slight, only sufficient to colour the surface of the metal blue, so that it looks like blued steel.

If these rods or sheets are so fine that even a superficial oxidation might be undesirable we may carry out the rolling operation in a vacuum or in an inert gas."


I would emphasise the second of these paragraphs. It casts, as I think will be found, a striking light upon the point at issue, The whole passage, regarded merely as a matter of English, bears, to my mind, its meaning on its face. The specification is dealing with a metal whose qualities have in many respects hitherto been obscure. The extent to which it will oxidise when heated in the air is one of its obscurities. The patentees have already referred to the changes in the nature of the metal which as they have found are undergone during the specified process—one for working tungsten while it is hot. Heat approaching 1,000° C. is indicated as required at one stage in the process; heat approaching the high melting point of the metal at another; red heat at a third. In the roling operation itself, to which the patentees are at the moment referring, adequate heating is such a desideratum that, as they say, "we prefer to heat both rolls and tungsten while the rolling operation is going on." More heat rather than less is everywhere indicated as desirable. Such is the setting of the passage in question. In it the patentees recognise the possible advantage of carrying out the rolling in the air. The risk, of course, is excessive oxidation, and in this passage they are saying that this operation may be so carried out without injury from oxidation, giving as their reason, which they introduce as a discovery, "that up to dull red the oxidation of compact metallic tungsten is very slight, only sufficient to cover the surface of the metal blue, so that it looks like blued steel." That is all. The statement is not made as a part of the recipe. Its sole purpose, on the face of it, is to justify the previous assertion that rolling may be carried out in the air. It does so by bringing forward the reassuring fact that at the heat of dull red there is in tungsten practically no oxidation at all. Oxidation, however, has at a dull red begun. Therefore, say the patentees, if you roll in the air you must guard against "overheating"; that is to say, heating beyond the point actually essential for effective rolling. Guard against that and you may roll in the air. As, however, from that process there must result some oxidation, then if in any case, as for example that of fine wires, you must avoid even superficial oxidation, you must not roll in the air but in a vacuum or inert gas where there will be no oxidation at all.


Such appears to me to be an accurate paraphrase of the entire passage, treating the problem merely as one of the interpretation of words. To my mind it seems clear that the overheating referred to is to be avoided only because of resulting oxidation; no such warning against it is either given or required where the rolling takes place in a vacuum or inert gas with the possibility of oxidation absent. As to the heat for rolling generally, the passage. in no way indicates, as I think, either that heat above a dull red would be "overheating" or that the necessary heat is not far above dull red, and there are other points in the specification to be alluded to later which would confirm an instructed reader in the above interpretation.


But, say the patentees, such is neither the meaning nor effect of the passage. Its purpose, or at any rate its result, is to tell you what is the proper, the not-to-be-exceeded heat for rolling, whether in the air or not in the air. That heat is a dull red. Any higher heat is "overheating," a thing to be avoided. And this view of the passage has, in effect, been accepted by all the learned Judges in Scotland who have dealt with it. Lord Sands possibly excepted, and by Russell, J. in England. "If," says the Lord President, explaining it, "heat above the degree which is consistent with successful working in the air is excessive heat, it seems to follow that the heat directed to be used for rolling must not be higher than dull red; say, from 600° to 700° C."


Russell, J. states his conclusion thus :—

"In my opinion, after careful consideration of the respective contentions, that passage must be construed as a statement that the working can be done in the air because provided the tungsten be not heated beyond a dull red heat, the oxidation is very slight, and that in cases where even mere superficial oxidation would be undersirable the operation may be carried out in circumstances which would exclude any oxidation. In other words, the contemplated working temperature is not in excess of dull red and there is a caution against overheating."


Now, my Lords, if there be any justification for what I have so far said, the broad answer to this interpretation of it has been already given. It ignores both the setting of the passage and its limited application—rolling in the air with its own attendant risk; it treats as an essential and integral part of the process of rolling, wherever carried out, a degree of heat referred to incidentally to support a previous statement that the process can be carried out even in the air, words more oblique to express the meaning suggested could hardly have been found.


But, my Lords, this interpretation may further be met by reference to the terms of the passage itself and in particular to its second paragraph, which I have already emphasised.


It will be noticed that in that paragraph the...

To continue reading

Request your trial
361 cases
  • Smith's Potato Estates Ltd v Bolland
    • United Kingdom
    • House of Lords
    • Invalid date
    ...are based, and in particular with the observations of Viscount Cave, L.C., in British Insulated and Helsby Cables, Ltd. v. Atherton, [1926] A.C. 205 (10 T.C. 155), who says that it has often been pointed out that the Act does not contain any express allowance or enumeration of deductions, a......
  • Heather v P-E Consulting Group Ltd; Commissioners of Inland Revenue v P-E Consulting Group Ltd
    • United Kingdom
    • Court of Appeal (Civil Division)
    • 14 July 1972
    ...has come up before. If so, go by it. If not, go by the nearest you can find. 9 One of the nearest cases to this one is British Insulated and Helsby Cables Ltd. v. Atherton 1926 A.C. 205, where a large sum is provided by a company to form the nucleus of a pension fund for employees. Each yea......
  • Beauchamp v F. W. Woolworth Plc
    • United Kingdom
    • House of Lords
    • 8 June 1989
    ...employed in the trade. 6Mr. Park who appeared for the taxpayer relied on the statement by Viscount Cave L.C. in British Insulated and Helsby Cables Ltd. v. Atherton [1926] A.C. 205, 213 that the question whether a contribution to form the nucleus of a pension fund was revenue or capital ex......
  • Spotlight Stores Pty Ltd v Commissioner of Taxation
    • Australia
    • Federal Court
    • Invalid date
  • Request a trial to view additional results
1 firm's commentaries
  • Tax Update: A Round-Up of Recent Tax Issues - Monday, 24 January 2011
    • United Kingdom
    • Mondaq United Kingdom
    • 25 January 2011
    ...cases were considered in detail: British Insulated & Helsby Cables v Atherton (establishment of a pension fund held to be capital) 1926 AC205; IRC v Carron Company 45 TC18 (expenditure on a charter of enduring benefit but of a revenue nature), and; Heather v PE Consulting Group Ltd 48 T......
5 books & journal articles
  • Tax Relief For Victims of Fraud
    • United Kingdom
    • Journal of Financial Crime No. 4-4, February 1997
    • 1 February 1997 65. (24) (1940) 23 TC 597, [1941] 1 KB 111, [1940] 4 All ER 412. (25) (1966) 44 TC 43, [1967] 1 WLR 489, [1967] 2 All ER 143. (26) (1925) 10 TC 155, [1926] AC 205. (27) See Capital Allowances Act 1990. (28) Taxation of Chargeable Gains Act 1992, s. 38(1)(a) (29) Interpreted by the Inland......
  • Revenue and Tax Law
    • Singapore
    • Singapore Academy of Law Annual Review No. 2013, December 2013
    • 1 December 2013
    ...are also consistent with ‘the enduring benefit of the trade’ test enunciated in British Insulated and Helsby Cables, Ltd v Atherton[1926] AC 205 which was endorsed in ABD (at [40] read with [27]). Ang J noted that as a result, the capacity of the taxpayer's telecommunication systems was inc......
    • Canada
    • University of Toronto Faculty of Law Review Vol. 79 No. 2, March 2021
    • 22 March 2021
    ...1-10. (70) Ibid at para 18. (71) Johns-Manville, supra note 11 at para 20, citing British Insulated and Helsby Cables, Ltd v Atherton, [1926] AC 205 at 213, 10 TC 155 (72) Johns-Manville, supra note 11 at para 25, citing Boris Bittker, Federal Taxation of Income, Estates and Gifts, vol 1 (B......
  • The deductibility of interest—a problem unresolved?
    • South Africa
    • Stellenbosch Law Review No. , May 2019
    • 27 May 2019
    ...interest is such that it is incurred from day to day, is overridden by the fact that, 121 British Insulated and Helsby Cables v Atherton 1926 AC 205 213. Cf COT v Rhodesia Congo Border Timber Co Ltd 24 SATC 602; Nchanga Consolidated Copper Mines Ltd v COT 1962 1 SA 381 (FC), 24 SATC 469 and......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT