A subdivision property of the taxpayer, a developer, was blockaded by Six Nations protesters. To diffuse the conflict, the Ontario government passed a by-law prohibiting any use of the property (rendering it valueless), and ultimately agreed to pay the taxpayer $15,800,000 in exchange for relinquishing its rights to the property and under a court order against the protesters, and for a release.
Before finding that as a factual matter the $15,800,000 receipt was not compensation for a "useless, worthless piece of land" (para. 167) but instead compensation for destruction of the taxpayer's business (i.e., goodwill), C. Miller J found (at para. 168) that s. 23 did not apply:
There was a conversion ... in which the DCE land completely lost its character as inventory. ... [T]he land did not lose its character as inventory because Henco went out of business and the land was sold while Henco was no longer carrying on a business (the very situation section 23 of the Act was put in place to address). The land lost its character as inventory by being made legally useless for development.