An individual taxpayer, who in two successive years clipped and sold overdue coupons in the amount of $10,000 on his Canada bonds to the trustee for five RRSPs (the beneficairies of which wre unrelated) for a sale price of $9,000, was held to have (1) received the sale proceeds as interest and (2) as a payment "in lieu of payment of... interest."
With respect to the first ground, Sheppard DJ stated (at p. 6335, DTC):
Interest includes compensation for the use of money....The Appellant's right under the bonds was to receive interest as compensation for the use of his money and that right could be realized by surrendering the coupons to any agent of Canada or equally by selling to the trust company by delivering the matured coupons; in either event, the proceeds in the Appellant's hands represent the sum received by him as compensation for the use of his money which he had lent to Canada.
With respect to the second ground "the words 'in lieu of' mean 'instead of' ... and therefore the sums of $9,000 have been received by the appellant 'instead of' the sums to be received from an agent of Canada on presenting the coupons."