In order to help her friend (Davies) defeat efforts of CRA to collect unpaid taxes from Davies, the taxpayer opened up a bank account in the taxpayer's own name to which Davies deposited funds from time to time and from which Davies from time to time withdrew funds to pay Davies' expenses. After noting (at para. 22) that "subsection 160(1) categorizes a transfer to a trust as a transfer of property", Sexton J.A. went on to note (at para. 27) that "it is clear that the transaction between Ms Davies and the respondent left Ms Davies without anything equivalent to the property transferred that could be collected by the CRA, and thus there could not possibly be consideration". Although "forbearance - the act of refraining from enforcing a right, obligation, or debt - can act as consideration for a promise given in return ... there is no legal forbearance in this case." (para. 29)
The taxpayer's appeal of an assessment of her under s. 160(1) was dismissed.