Buccini v. Canada, 2000 DTC 6685 (FCA) -- summary under Paragraph 7(1)(b)

Following the amalgamation of the taxpayer's employer with other Canadian subsidiaries of the U.S. parent, the taxpayer executed a settlement agreement with the Canadian employer in which he acknowledged that a payment of $83,900 was in full settlement of all claims arising from his employer's unilateral termination of the employee stock option agreement between the taxpayer and the employer. In finding that this sum was a tax-free receipt, and in reversing a finding of the Tax Court Judge that it represented the value of consideration from a disposition pursuant to s. 7(1)(b), Malone J.A. stated that "a 'disposition' under paragraph 7(1)(b) refers to a transaction in which the taxpayer voluntarily agrees to exchange property rights that have accrued under an employee stock option agreement for some other consideration", and noted here that instead there had been a unilateral repudiation of the taxpayer's rights under the option agreement by the employer, and that such unilateral conduct constituted a fundamental breach of the contract that terminated it as of that date.