The appellant ("Caithkin") worked as an intermediary in the foster-care system, by finding suitable foster homes for various Children's Aid Societies and placing children there and providing related training and supervisory services. The Societies paid the appellant a per-diem rate, out of which the appellant paid the foster homes. Graham J found that Caithkin had not provided an exempt supply under s. 2 of Part IV of Sched. V, as it satisfied only two of the three requirements of s. 2:
- Caithkin was making a "re-supply" to the Societies of "care, supervision and place of residence services" that it in turn "acquire[d] from the foster parents" (TCC para. 24).
- Caithkin was providing care, supervision and place of residence supplies "to children," notwithstanding that the recipient of such supply was the Societies (TCC para. 33).
- However, Caithkin was not providing the services in an establishment that it operated. Caithkin could be said to be providing the foster parents' homes to the children, but it could not reasonably be said to be operating them (TCC para. 37).
In upholding the finding below that Caithkin was making taxable supplies, Rennie JA dismissed the appellant's further argument that "establishment" in s. 2 is not restricted merely to physical locations and included a business organization, stating (at para. 19):
Given its ordinary meaning, the word "in," which informs the word "establishment", denotes a physical place ... . A bundle of services is not a physical place.