http://decision.tcc-cci.gc.ca/tcc-cci/decisions/en/item/98045/index.do 
1336440 Ontario Limited (Car Club London) v. The Queen (October 8, 2014 – 2014 TCC 302) was an HST appeal with somewhat odd background facts.
[1] 1336440 Ontario Limited carries on business as the London Car Club (“London Car Club”) specializing in the purchase and sale of used luxury vehicles. This Appeal concerns one such vehicle, a Mercedes Benz, that the Minister of National Revenue (the “Minister”) maintains was supplied by the London Car Club for consideration of $56,500 in 2010. The Minister consequently assessed Goods and Services Tax/Harmonized Sales Tax (“GST/HST”) of 15% – $8,750. The London Car Club argues there was no sale and, therefore, no supply subject to GST/HST.
[2] Ms. Pardo, a manager at London Car Club, testified on behalf of the company. The London Car Club has had a longstanding relationship of over 30 years with one of its customers, Mr. Harris, who lives in Nova Scotia. Ms. Pardo described Mr. Harris (now in his 80’s) as being something of a father figure to one of the owners of the London Car Club, Mr. El-Hindi.
[3] In a phone conversation in the summer of 2010, Mr. Harris asked Mr. El‑Hindi to locate a black 2007 Mercedes Benz S550 with light interior and low kilometres. Mr. Harris sent $56,500 to the London Car Club though neither side knew exactly what the final price might be. Mr. Harris had, over the long relationship with Mr. El-Hindi, lent money to the London Car Club to assist in the business. According to Ms. Pardo, the $56,500 was recorded in the London Car Club’s books as a loan.
[4] The London Car Club found online in Toronto what it believed to be the car Mr. Harris wanted – a 2007 Mercedez Benz S550 with registration number 869196154RT0001 (“the Mercedes Benz”). Through its wholesale arm, Executive Auto Sales, the London Car Club acquired “the Mercedes Benz” on August 26, 2010. The colour of “the Mercedes Benz” was described as black opal.
[5] “The Mercedes Benz” was shipped to Mr. Harris in Nova Scotia in September 2010. Upon its arrival, Mr. Harris advised the London Car Club that the car was not what he wanted as it was dark blue not black. Mr. Harris assisted the London Car Club in making arrangements to store the car in Nova Scotia at Bobby Allen Motors, with the hopes that the London Car Club could find a new buyer. In October 2010 the registration transferred from the wholesaler, Executive Auto Sales, to the London Car Club, as a retailer: an invoice between the two related companies showed a price of $47,600 plus HST of $6,188. There was never any written document, Bill of Sale or anything else between the London Car Club and Mr. Harris.
[6] In September, October and November 2010 Mr. Harris ordered three other cars from the London Car Club and the $56,500 held by the London Car Club was used for these purchases.
The court accepted the appellant’s position that it simply never sold the Mercedes Benz:
[13] If no deemed supply, I feel it is necessary to determine whether there has been a supply, defined in the Act as:
“supply” means, subject to sections 133 and 134, the provision of property or a service in any manner, including sale, transfer, barter, exchange, licence, rental, lease, gift or disposition;
While the definition is broadly worded, I have no difficulty in finding there has been no sale, transfer, barter, exchange, licence, rental, lease, gift or disposition. The London Car Club simply did not sell or dispose of “the Mercedes Benz”. I find as a fact that Mr. Harris never took possession of “the Mercedes Benz”: it was just not the property he wanted. Under these circumstances, I find there was a non-event: nothing was provided.
[14] Had I found there was a deemed supply would tax be payable pursuant to section 168(1) of the Act at the time Mr. Harris transferred $56,500 to the London Car Club? Tax would only be payable if that amount is consideration for the supply.
[15] This is a unique situation where there is a longstanding relationship between the supplier and the recipient. Part of that relationship was the lending of money by Mr. Harris to the London Car Club, run by his friend, Mr. El-Hindi. The London Car Club had a loan account established for Mr. Harris. On receipt of the $56,500 that money was accounted for through the loan account. The funds were never used for “the Mercedes Benz”. Indeed, the funds from the loan account went to the purchase of three different vehicles.
[16] There was some discussion at trial as to whether the $56,500 was a deposit or down payment. I conclude it was neither. There was no property against which the funds could be held as either a deposit or down payment. The most appropriate way, especially given the history of the relationship between the Parties, was to do exactly what the Parties did – treat it as a loan. It was not consideration for “the Mercedes Benz”. No consideration ever even came due for “the Mercedes Benz”.
…
[18] I find this provision is not applicable as there has not been a supply by way of sale. There is no agreement for the sale of “the Mercedes Benz”, no Bill of Sale, no invoice, no transfer of ownership by registration, no acceptance of delivery, no consideration for “the Mercedes Benz”. Section 168(3) of the Act does not come into play.
[19] While I understand why representatives of the Canada Revenue Agency would consider applying section 133 and section 168 of the Act to find this purported transaction attracts GST, with respect, I find it is an overly technical, let’s sweep everything into the net approach, that leaves a taxpayer, such as the London Car Club, shaking its head, crying plaintively – but I never sold the car. The GST is premised on there being a supply of goods or services. Put simply, I find that in these unique circumstances there has not been a supply, deemed or otherwise.
[20] I allow the Appeal and refer the matter back to the Minister for reconsideration and reassessment on the basis there is no tax liability in respect of “the Mercedes Benz”.
Comment: The court appears to have resolved this somewhat odd case in a straightforward and practical fashion.