The appellant credit union held a fixed and floating charge over the assets of the debtor company.
A receiver was appointed and realized the assets.
The Crown claimed priority for unremitted source deductions (income tax, CPP, UI) made by the employer prior to receivership, and for deductions on wages paid by the receiver after appointment.
The Supreme Court of Canada held that the receiver must remit deductions on wages it paid.
For pre-receivership deductions, the Crown had priority for CPP and UI deductions due to statutory deeming provisions applying in a 'liquidation', but lacked priority for income tax deductions which were not kept separate and apart.
