The Ottawa Senators Hockey Club Corporation entered CCAA protection.
The Crown claimed priority over secured creditors for unremitted payroll deductions, GST, and associated penalties and interest.
The motion judge held the Crown did not have priority for penalties/interest on payroll deductions or for unremitted GST.
On appeal, the Court of Appeal upheld the decision regarding payroll deduction penalties and interest, finding the Crown ranks as an unsecured creditor.
However, the Court allowed the appeal regarding unremitted GST, holding that the deemed trust provision in section 222(3) of the Excise Tax Act prevails over section 18.3(1) of the CCAA based on the rule of effectivity for 'notwithstanding' clauses.
