Morley v. The Queen, 2004 DTC 2604, 2004 TCC 280, briefly aff'd 2006 DTC 6351, 2006 FCA 171 -- summary under A

A partnership acquired Canadian rights to software in consideration for $960,000 in cash and an acquisition note in the amount of $12.15 million under which the interest was capitalized for the first nine years and thereafter quarterly instalments became due. In finding that the capital cost to the partnership of the software did not include the amount of the acquisition note, Archambault J. accepted the Minister's submission that the vendor and the purchasing partnership never intended there to be a legal liability under the acquisition note (or the subscription notes of the limited partners that were issued to the vendor in replacement of the acquisition note). This was corroborated by the fact that the subscription notes were never paid, that a lawsuit brought by the partnership against the vendor, which was settled by the subscription notes being replaced by limited recourse notes recoverable only against the shares of a private corporation that were worthless, was mere window dressing to accomplish this restructuring and that the fair market value of the acquired software rights was not more than $960,000.