The appellant manufactured drugs in Montreal and sold them to wholesalers and institutional customers across Canada pursuant to orders that were accepted by it in Montreal. Delivery was made in Montreal to carriers who delivered the goods to the customers. It employed a small sales force in British Columbia who called on institutions and pharmacists in order to promote orders that, in most cases, would be sent directly to Montreal or to the wholesale distributors.
In finding that the appellant was not carrying on business in British Columbia for purposes of s. 3(3) of the Social Services Tax Act (BC), Wilson C.J. applied the proposition stated in Maclaine and Co. v. Eccott, [1926] AC 424 that "'in the case of a merchant's business, the primary object of which is to sell goods at a profit, the trade is (speaking generally) exercised or carried on ... at the place where the contracts are made'."