The appellant ("CTM") sold mortgage loans made by it to arm's length securitization trusts and serviced the sold mortgages including collecting and accounting for payments, and dealing with renewals and defaults. The consideration for a sale for the most part comprised a "Closing Payment" paid by the purchaser trust out of the proceeds of commercial paper issuances and "Deferred Amounts" representing most of the cash subsequently generated to the trust from the purchased mortgages net of all other outlays. CTM did not explicitly charge the trusts for the servicing, but recorded fees for such services in its financial statements.
After finding that there was a single supply of a financial service by CTM, Bowman ACJ went on to find that if this were not the case, s. 138 or 139 would have applied to deem this result to have occurred, stating (at para. 25) that the above-summarized provisions of the sale agreement "establish conclusively that the consideration for the sale of the mortgages and the servicing of the mortgages was a single consideration." Respecting the reporting of an imputed servicing fee of 25 basis points per annum in CTM's financial statements, he stated (at para. 28) that "there is… no basis for the respondent to assume that a note in the financial statements of a party to a transaction who is not even the person primarily liable for the GST can override the intentions of both parties as evidenced in the agreement between them."