The taxpayer received pursuant to the Expropriation Act (Ontario) $3 million in respect of the acquisition of its land and building by the City of Toronto and a further $9 million from the City in respect of damages occasioned as a result of its inability to relocate its business following the acquisition.
After noting that, in the context of s. 14, "'consideration' ... must be understood as the thing that the recipient of a payment gives in exchange for the payment", Sharlow J.A. found that the consideration given by the taxpayer for the $9 million payment was the release of any claim by it for compensation for the destruction of the goodwill of its business, and that under the mirror image rule the amount was not an eligible capital amount because the expropriation was effected for civic purposes rather than for the purposes of producing profit, and an expenditure made by the taxpayer for this purpose would not qualify as an eligible capital expenditure.