The respondent leased two helicopters to Pegasus Helicopters under agreements containing an option to purchase at fair market value.
The leases were not registered under the Conditional Sales Act.
When Pegasus defaulted on its bank loans, the appellant bank appointed a receiver.
The respondent claimed priority to the helicopters, arguing the leases were not conditional sales.
The Supreme Court of Canada held that the leases contained true options to purchase, giving the lessee the unilateral right to compel a sale, and therefore fell within the definition of a conditional sale under the Act.
Because the leases were unregistered, the respondent's reservation of title was void against the appellants.
