The taxpayer, which sold refrigerators under conditional sales contracts requiring a 10% down payment and the balance payable in 24 monthly instalments, assigned the contracts to a finance company, with the finance company holding back 5% to 10% of the purchase price, and with the taxpayer guaranteeing the payment to the finance company of the instalments.
In finding that the taxpayer had sold the contracts to the finance company, rather than receiving a loan from the finance company, Thurlow J. noted that the assignments to the finance company used the word "sale", and that the taxpayer had no right to get back the refrigerator by refunding to the finance company the money previously received. Accordingly, the reserve under paragraph 85B(1)(d) was not available (except in the amount already allowed by the Minister in respect of the finance company holdbacks).