The taxpayer received a lump sum payment of $105,000 in settlement of her claim for wrongful termination of her long-term disability benefits. Although the portion of the settlement that was in respect of future disability benefits was not paid "pursuant to" the plan because there was no obligation on the part of the insurer to make a lump sum payment under the terms of the plan (para. 11), under the surrogatum principle, the portion of the lump sum payment that was intended to replace past disability payments was taxable to her under s. 6(1)(f). Charron J stated (at para. 15):
The determinative questions are: (1) what was the payment intended to replace? And ... (2) would the replaced amount have been taxable in the recipient’s hands? ... [I]t cannot be disputed on the evidence that part of the settlement monies was intended to replace past disability payments. It is also not disputed that such payments, had they been paid to Ms. Tsiaprailis, would have been taxable.