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T HE TAXPAYER, A HORESE BREEDER, OWNS SEVERAL HORSER WHICH ARE USED BY HIME IN THE ORDINARY COURSE OF HIS BUSINESS OF BREEDING AND SELLING THE...

T HE TAXPAYER, A HORESE BREEDER, OWNS SEVERAL HORSER WHICH ARE USED BY HIME IN THE ORDINARY COURSE OF HIS BUSINESS OF BREEDING AND SELLING THE PROGONY.  THE AVERAGE PRICE HE OBTAINS FOR A PROGENY IS r8111.  THE TAXPAYERS NEIGHBOUR, ALSO A HORSE BREEDER =, BREEDS THOROUGHBRED RACING HORSES FOR WHICH E OBTAINS AN AVERAG PRICE PER PROGENY OF R100000.  ONE OF THE TAXPAYERS STALLIONS MANAGED TO ESCAPE ONTO THE NEIGHBOURS FARM AND MATED WITH THE NEIGHBOUSE MOST VALUEABLE MARES, FROM WHICH TWO FOALS WERE BORN.  WHEN THE TWO FOALS WERE SOLD AT THE NORMAL YEARLING SALES, A PRICE OF ONLY R20 000 WAS OBTAINED FOR THE TWO PROGENY INSTEAD OF APPROX R200 000 WHICH COULD HAVE BEEN EXPECTED HAD THE RACING MARES BEEN MATED WITH ANY ONE OF THE NEIGHBOURS OWN STALLIONS.   THE TAXPAYER S NEIGHBOUR INSTITUTED A CLAIM FOR DAMAGES OF R180 000 AGAINST THE TAXPAYER.  THE TAXPAYER DEFENDED THE ACTION BUT THE CAPE PROVINCIAL DIVISION OF THE HIGHCOURT FOUT THAT THE TAXPAYER WAS NEGLIGEND IN THAT HE FAILED TO EXERCISE REASINALBE CARE TO PREVENT THE POSSIBILITY OF HIS HORSES ESCAPING AND IMPREGNATING THE NEIGHBOURS VALUEBLE MARES.  THE TAXPAYER WAS AWARDED R180000 DAMAGES.  IN DEFENDING THE ACTION, THE TAXPAYER INCURRED LEGAL COST OF R20 000.  ADVISE BASED ON ABOVE IF THE LEGAL COST IS DEDUCTIBLE.

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