The Minister of National Revenue appealed a decision holding that accounts receivable factored to a third party were not subject to a deemed trust for unremitted payroll deductions.
The Supreme Court of Canada held that while the deemed trust under s. 227(4.1) of the Income Tax Act attaches to property acquired by a tax debtor after a default, it does not continue to attach to property once it has been sold to a third-party purchaser for value in the ordinary course of business.
The appeal was dismissed.
