Létourneau,
J.A.:—After
careful
analysis
of
the
decision
and
the
submissions
made
by
counsel,
I
am
satisfied
that
the
trial
judge
committed
no
error
that
warrants
the
intervention
of
this
Court.
Although
there
were
some
misstatements
of
fact
by
the
trial
judge,
they
were
of
no
consequence.
There
was
ample
evidence
on
which
the
trial
judge
could
base
his
findings.
He
correctly
applied
the
legal
principles
relevant
in
such
cases.
He
looked
at
the
purpose
intended
by
the
parties
when
the
negotiated
payment
of
$300,000
was
made
in
compensation
for
the
cancellation
of
an
exclusive
distributorship
agreement
and
he
rightly
concluded
from
the
terms
of
the
agreement
that
the
payment
was
intended
to
replace
the
loss
of
profits
and
therefore
was
one
on
account
of
income.
He
then
went
beyond
the
intent
of
the
parties
to
analyze
the
real
character
or
substance
of
the
transaction
or
receipt
(see
M.N.R.
v.
Import
Motors
Ltd.,
[1973]
C.T.C.
719,
73
D.T.C.
5530).
He
was
right
in
his
conclusion
that
the
rights
and
advantages
surrendered
on
cancellation
of
the
distributorship
agreement
did
not
destroy,
materially
cripple
(see
Commissioners
of
Inland
Revenue
v.
Fleming
et
Co.
(Machinery)
Ltd.,
[1952]
S.L.T.
147)
or
greatly
affect
(see
Barr,
Crombie
et
Co.
v.
Commissioner
of
Inland
Revenue
(1945),
S.C.
271
per
Lord
Normand)
the
profit-making
apparatus
or
structure
of
the
recipient
of
compensation.
There
was
indeed
no
significant
degree
of
dislocation
to,
or
impairment
of,
the
trading
structure
of
the
appellant
(see
Westfair
Foods
Ltd.
v.
Canada,
[1991]
2
C.T.C.
343,
91
D.T.C.
5625).
Consequently,
the
appeal
should
be
dismissed
with
costs.
Appeal
dismissed.
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