The registrant was a hotel company that paid franchise fees to a hotel franchise ("Marriott") in the United States. Marriott's fees were based on gross room revenues. Lamarre J. found that, because 30% of the registrant's revenue was from exempt stays (i.e. exceeding one month), 30% of the franchise fees were not incurred in respect of a "commercial activity" as defined in s. 123(1). Accordingly, she affirmed the Minister's assessment, which was made on the basis that the provision by Marriott of franchise rights was an "imported taxable supply" under s. 217, for which the registrant was liable to pay GST on the consideration paid on the basis that 30% of the franchise fees was not eligible for an input tax credit. One of the registrant's arguments was that the 30% franchise fees were not paid in respect of the long-term stays because 95% of its long-term bookings were not connected in any way with the franchise brand, and were booked through its internal management office. The court found that these numbers were closer to 75%, so it could not be said that the fees paid for the Marriott "banner" related exclusively to the short-term bookings. After noting that the meaning of "all or substantially all" must be left to the discretion of the trier of fact, Lamarre J. stated (at para. 29):
In my opinion, there is a limit to be observed. Parliament used the expression "all or substantially all," which means, in my view, that the figure must be closer to the totality than half-way between the majority and the totality.