The debtor company commenced CCAA proceedings and obtained a stay.
It owed unremitted GST to the Crown.
The ETA creates a deemed trust for unremitted GST, but the CCAA nullifies statutory deemed trusts in favour of the Crown.
The chambers judge ordered the GST funds segregated in the Monitor's trust account.
When reorganization failed, the debtor sought to make an assignment in bankruptcy.
The Crown sought immediate payment of the GST funds.
The Supreme Court held that the CCAA rule prevails, meaning the Crown ranks as an unsecured creditor for GST claims during CCAA proceedings.
The Court also held that the chambers judge had the discretion to partially lift the stay to allow the assignment in bankruptcy, and that no express trust was created by segregating the funds.
