Case information

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Case summaries are prepared by the Office of the Registrar of the Supreme Court of Canada (Law Branch). Please note that summaries are not provided to the Judges of the Court. They are placed on the Court file and website for information purposes only.

Legislation — Interpretation — GST amount collected by company deposited in bank account —Notice of garnishment from Minister — Notice of intention to declare bankruptcy two weeks later — Notice of stay sent to bank by trustee in bankruptcy — Notice of stay complied with — Notice of assessment — Whether Crown is owner of GST amount for which notice of garnishment issued prior to bankruptcy — Bankruptcy and Insolvency Act, R.S.C. 1985, c. B 3, ss. 67(2), 70(1) — Excise Tax Act, R.S.C. 1985, c. E 15, s. 317(3).

A company owed the federal government $12,014 in previously collected GST. The company had $8,868 in an account at the TD Bank. On December 11, 2007, Revenu Québec, which administered the GST in the province, sent the bank a requirement to pay in which it claimed ownership of the amount in the bank account. On December 24, the company filed a notice of intention to make a proposal to its creditors; the same day, the trustee in bankruptcy sent the bank a notice to stay Revenu Québec’s notice of garnishment, which the bank did. On April 9, 2008, Revenu Québec sent the bank a notice of assessment along with a joint letter from it and Revenue Canada. On September 26, 2008, after an objection to the assessment was filed, Revenu Québec realized that it had already taken $6,000 from the account and issued a reassessment for $2,868. The bank appealed the reassessment in both the Court of Québec and the Tax Court of Canada. The Tax Court of Canada gave priority to the requirement to pay predating the bankruptcy; the Federal Court of Appeal dismissed the bank’s appeal. In the meantime, the parties agreed to suspend their proceedings in the Court of Québec.