The wholly-owned Canadian subsidiary of the taxpayer declared a dividend, with the resolution stipulating that the dividend was "to be payable by the Corporation by the issuance of a demand promissory note". Sharlow J.A., before finding that the dividend was paid by means of delivery of the promissory note given that this was the expressed intention in the resolution, stated (at para. 7):
"The legal effect of delivery of a promissory note depends upon all the relevant facts, the most important fact being the intention of the maker of the note as determined by the evidence. For example, in some circumstances a promissory note may be evidence of a debt to be paid at some future time. In other circumstances, delivery of a promissory note may itself be payment of a particular obligation."