The taxpayer's business was to facilitate B.C. municipalities in obtaining vehicles and equipment. The taxpayer would borrow funds from the B.C. Municipal Finance Authority (the "MFA"), purchase the equipment from the supplier, and lease the equipment to the municipality. It would then assign the lease payments, lease, and equipment to the MFA.
Campbell J. interpreted such assignment as an absolute assignment rather than one by way of security only. In effect, the taxpayer was only acting as a "conduit" through which municipalities could borrow from the MFA to acquire equipment. Accordingly, such assignment repaid an interim loan from the MFA, and the lease payments subsequently received under the lease were not income to the taxpayer.