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Supreme Court Grants leave in HST Deemed Trust Case

Mar 22, 2018

On March 22, 2018, the Supreme Court of Canada granted leave to Callidus Capital Corporation to appeal the decision of the Federal Court of Appeal in Her Majesty the Queen in Right of Canada v. Callidus Capital Corporation.  In that decision, the majority of the Federal Court of Appeal held that the section 222(3) of the Excise Tax Act, which creates a statutory deemed trust on all property of a tax debtor ranking in priority to all security interests in such property for collected but unremitted HST, is to be interpreted such that secured creditors who do not comply with the obligation to pay proceeds derived from deemed trust assets are personally liable to the Crown, which has a separate cause of action against them, irrespective of the subsequent bankruptcy of the tax debtor which extinguishes the deemed trust.

 

For further information on the case, please do not hesitate to contact the lawyers for Callidus in this matter, Harvey Chaiton (harvey@chaitons.com or (416) 218-1129) or Sam Rappos (samr@chaitons.com or (416) 218-1137).

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