After having incurred substantial GST in acquiring a transit system for exempt use, the appellant commenced to lease the system to another municipal transit entity for rent of $1 per year, but with the lessee being obligated to pay municipal taxes imposed on the leased premises (which amounted to around $2 million per year). C Miller J found that this lease represented a supply of the system for consideration other than nominal consideration (so that there was a change of use under ss. 209(2) and 199(3) entitling the appellant to recover the basic tax content of this asset), on the basis that the municipal tax obligation represented valuable consideration. Before so concluding, C Miller J noted that the Notice of Objection had not referred to the property taxes, and found that the appellant was not precluded from relying on this fact, stating (at paras. 40, 42):
There is no change to the amount at issue before me from what was set out in the Notice of Objection, nor has the issue changed. The issue has always been the entitlement to the ITCs.
…[I]t is the issue and quantum that is of significance to the Minister, not the facts and reasons that the Respondent points to as the failure. …[A]t the 1994 Tax Conference Mr. Beith went on to say…:
[I]n contrast to the requirements with respect to issue and quantum, additional facts and reasons can be raised in appeals.