The taxpayer issued trading stamps to the value of 1.5% of the price paid for merchandise at its retail food stores. When a customer had accumulated sufficient stamps, he could exchange them for "free gifts" of articles of the taxpayer listed in a catalogue.
The Crown unsuccessfully argued that no amount was received by the taxpayer for the trading stamps for purposes of s. 85B(1)(a)(i) of the pre-1972 Act (now s. 12(1)(a)(i)) with the result that no reserve could be claimed under s. 85B(1)(c). Cattanach J. stated (p. 5116):
"When two articles are sold together for one price without a price being put upon each separately, it does not follow that one article was free and that the price is attributable exclusively to the other article."