Michael J. Lema

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.

The appellant purchased the assets of the Nova Scotia Power Corporation (NSPC) upon its privatization and sought to deduct capital cost allowances.

The Minister of National Revenue denied the deductions on the basis that NSPC, as a Crown agent, was immune from income tax legislation.

The Supreme Court of Canada held that NSPC was an agent of the Crown acting within its purposes, as expressly provided by the provincial Power Corporation Act, and was therefore entitled to Crown immunity under the federal Interpretation Act.