Coughlan v. The Queen, 2001 DTC 719 (TCC) -- summary under Compensation Payments

General damages which the taxpayer received in an action against a corporation of which he had been an officer and shareholder were exempt capital receipts given that his purpose in litigating was to protect and preserve his reputation as a resource company promoter. Damages recovered for failure of the corporation to indemnify against, and maintain insurance for, his litigation expenses also were capital receipts. After noting (at p. 724) the "difference between prejudgment interest on a debt or other liquidated amount wrongfully withheld, and on an award of damages assessed", Bowie T.C.J. found that prejudgment interest awarded to the taxpayer was taxable as interest under s. 12(1)(c) based on a finding in the civil action that the right to indemnity on which the interest was awarded arose on the date the taxpayer was sued.