At the time the taxpayer contacted the lessor ("Hewitt") of equipment to it that it wished to exercise the purchase option, Hewitt suggested another institution ("Lafleur") as a source of financing the purchase. Accordingly, the taxpayer entered into a lease with Lafleur.
In finding that the taxpayer did not acquire the equipment pursuant to the lease with Lafleur (and therefore, was not eligible for an investment tax credit under s. 127(5)), Tremblay TCJ. noted that one clause of the lease provided that "ownership of all vehicles leased shall remain with the lessor, and said vehicles should be registered in the lessor's name"; that another clause provided that at the expiry of the contract the lessor (Lafleur) was required to attempt to arrange the sale of the vehicle, with any shortfall to be paid by the taxpayer, and any excess to be refunded by Lafleur; and that a transfer of ownership took place between Hewitt and Lafleur.
The taxpayer also was not eligible for the investment tax credit because of the prior lease of the equipment from Hewitt.
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