Sobier,T.CJ.:—The
appellant
appeals
the
assessment
of
the
Minister
of
National
Revenue
(the"Minister")
dated
March
29,
1989
whereby
the
Minister
assessed
the
appellant
under
subsection
153(1.3)
of
the
Income
Tax
Act,
R.S.C.
1952,
c.
148
(am.
S.C.
1970-71-72,
c.
63)
(the"Act")
as
the
person
liable
to
deduct
or
withhold
and
remit
in
respect
of
the
amounts
required
under
subsection
153(1).
The
appellant
was
appointed
interim
receiver
of
the
property
of
C.J.
Wilkinson
Ford
Mercury
Sales
Ltd.
(the
“
corporation”)
pursuant
to
an
order
dated
April
21,
1986
of
the
Registrar
in
Bankruptcy
of
the
Supreme
Court
of
Ontario
in
Bankruptcy.
The
operative
portion
of
the
order
reads
as
follows:
1.
This
Court
Orders
that
Spicer
MacGillivray
Inc.,
be
appointed
interim
receiver
of
the
property
of
the
said
respondent,
C.J.
Wilkinson
Ford
Mercury
Sales
Ltd.,
and
that
the
said
interim
receiver
be
directed
to
take
immediate
possession
of
the
property
of
the
said
C.J.
Wilkinson
Ford
Mercury
Sales
Ltd.
and
control
receipts
and
disbursements
thereof
but
otherwise
not
to
interfere
with
the
carrying
on
of
its
business
by
the
debtor
in
the
ordinary
manner
of
trade
until
the
hearing
of
the
petition
herein
or
until
this
Court
shall
make
further
order.
The
appellant
is
the
successor
to
Spicer
MacGillivray.
Among
other
things,
in
determining
whether
the
appellant
has
been
properly
assessed,
it
must
be
established
that
the
charging
provisions
of
subsection
153(1.3)
apply,
and
that
the
appellant
carried
out
those
functions
enumerated
in
that
subsection.
The
subsection
reads
as
follows:
153.
(1.3)
For
the
purposes
of
subsection
(1),
where
a
trustee
who
is
administering,
managing,
distributing,
winding
up,
controlling
or
otherwise
dealing
with
the
property,
business,
estate
or
income
of
another
person
authorizes
or
otherwise
Causes
a
payment
referred
to
in
subsection
(1)
to
be
made
on
behalf
of
that
other
person,
the
trustee
shall
be
deemed
to
be
a
person
making
the
payment
and
the
trustee
and
that
other
person
shall
be
jointly
and
severally
liable
in
respect
of
the
amount
required
under
subsection
(1)
to
be
deducted
or
withheld
and
to
be
remitted
on
account
of
the
payment.
It
must
also
be
determined
that
the
interim
receiver
was
a
"
trustee"
under
the
definition
contained
in
subsection
153(1.4).
The
provisions
of
this
subsection
are
as
follows:
153
(1.4)
In
subsection
(1.3),
“trustee”
includes
a
liquidator,
receiver,
receivermanager,
trustee
in
bankruptcy,
assignee,
executor,
administrator,
sequestrator
or
any
other
person
performing
a
function
similar
to
that
performed
by
any
such
person.
In
determining
this
latter
question,
it
is
useful
to
examine
the
case
law
on
the
question
of
what
an
interim
receiver
is
and
what
it
is
not.
The
relevant
section
of
the
Bankruptcy
Act,
R.S.C.
1985,
c.
B-3
dealing
with
interim
receivers
may
be
found
in
section
46.
46.
(1)
The
court
may,
if
it
is
shown
to
be
necessary
for
the
protection
of
the
estate
of
a
debtor,
at
any
time
after
the
filing
of
a
petition
for
a
receiving
order
and
before
a
receiving
order
is
made,
appoint
a
licensed
trustee
as
interim
receiver
of
the
property
of
the
debtor
or
of
any
part
thereof
and
direct
him
to
take
immediate
possession
thereof
on
such
undertaking
being
given
by
the
petitioner
as
the
court
may
impose
with
respect
to
interference
with
the
debtor's
legal
rights
and
with
respect
to
damages
in
the
event
of
the
petition
being
dismissed.
(2)
The
interim
receiver
appointed
under
subsection
(1)
may,
under
the
direction
of
the
court,
take
conservatory
measures
and
summarily
dispose
of
property
that
is
perishable
or
likely
to
depreciate
rapidly
in
value
and
exercise
such
control
over
the
business
of
the
debtor
as
the
court
deems
advisable,
but
the
interim
receiver
shall
not
unduly
interfere
with
the
debtor
in
the
carrying
on
of
his
business
except
as
may
be
necessary
for
the
conservatory
purposes
or
to
comply
with
the
order
of
the
court.
Counsel
for
the
appellant
referred
to
a
number
of
authorities
dealing
with
interim
receivers.
In
particular,
she
referred
to
In
re
Stuart
&
Sutterby
(1929),
2
C.B.R.
1
(Ont.
Reg.).
At
page
5
the
Registrar
stated
as
follows:
The
sole
purpose
of
an
interim
receiver
is
to
preserve
the
assets
and
further
than
that
it
is
not
necessary
for
him
to
go.
He
is
there
as
a
watchman
only
and
for
no
other
purpose,
except
under
special
circumstances.
What
more
do
the
creditors
want
or
need?
Many
creditors
seem
to
think
that
once
a
petition
is
filed
a
debtor
has
no
rights.
If
he
is
dishonest,
then
perhaps,
less
consideration
may
be
given
him,
but
if
he
is
honest,
is
it
not
enough
for
an
officer
of
the
Court
to
take
possession
of
all
the
property
he
may
have,
seeing
that
there
is
always
the
possibility
that
the
petition
may
be
dismissed?
Particular
cases
may
call
for
particular
orders,
but
I
see
no
need
whatever
for
any
other
power
to
be
given
to
the
interim
receiver
than
that
of
a
watchman.
In
the
case
of
a
mercantile
business,
if
business
is
carried
on,
it
is
essential
that
he
should
control
the
receipts
from
goods
sold;
on
the
other
hand
the
debtor
ought
not
to
be
embarrassed
by
the
lack
of
using
those
receipts
for
legitimate
purposes
nor
is
it
necessary
to
preserve
the
assets
to
interfere
otherwise
with
the
debtor
carrying
on
in
the
usual
way.
It
might
be
his
duty
though,
to
interfere
if
he
found
that
the
debtor
was
wasting
his
assets,
but
that
does
not
mean
that
he
is
to
substitute
his
opinion
for
that
of
the
debtor
as
to
what
is
legitimate
business.
In
any
such
case
of
doubt
he
should
come
to
the
Court
for
directions.
This
decision
was
appealed
to
the
Supreme
Court
of
Ontario
and
reported
as
In
re
Stuart
&
Sutterby
(1930),
2
C.B.R.
279.
However,
the
Registrar's
analysis
of
the
functions
of
an
interim
receiver
were
not
disputed
even
though
the
appeal
was
allowed.
In
re
Stuart
and
Sutterby
was
applied
In
Re
Big
Eddy
Shops
Ltd.
(1977),
24
C.B.R.
(N.S.)
90
(S.C.O.).
Reference
was
also
made
to
Price
Waterhouse
Ltd.
v.
Marathon
Realty
Co.
(1979),
32
C.B.R.
(N.S.)
71
(Man.
Q.B.).
The
issue
in
Price
Waterhouse
was
whether
a
landlord
could
distrain
for
arrears
of
rent
prior
to
the
filing
of
a
petition
in
bankruptry
and
prior
to
the
appointment
of
Price
Waterhouse
as
interim
receiver.
At
page
73,
Hamilton,
J.
made
the
following
remarks:
The
authority
of
the
interim
receiver
is
limited
by
s.
28(2)
[now
sec.
46]
to
taking
conservatory
measures,
but
he
is
not
to
unduly
interfere
with
the
debtor
in
carrying
on
of
his
business.
The
interim
receiver
may
be
authorized
to
take
possession
of
the
property
of
the
debtor,
but
I
can
find
nothing
in
the
Act
to
suggest
that
the
property
of
the
debtor
automatically
vests
in
the
interim
receiver.
This
is
not
to
say
that
the
interim
receiver
may
not
have
had
authority
to
seize
the
assets
prior
to
their
sale
or
the
proceeds
prior
to
their
payment
to
the
landlord,
but
it
made
no
effort
to
do
so.
Unlike
the
interim
authority,
a
receiving
order
passes
and
vests
the
property
of
the
debtor
in
the
receiver
(s.
50(5)
):
.
.
.
Finally
dealing
with
interim
receivers,
counsel
referred
to
In
re
Soren
Brothers
(No.
2)
(1926),
7
C.B.R.
545
(S.C.O.).
This
decision
also
deals
with
an
interim
receiver's
liability
to
pay
rent.
The
Registrar,
Holmstead,
K.C.
stated
at
page
546
as
follows:
In
the
absence
of
any
authority
to
the
contrary
I
am
of
the
opinion
that
neither
an
interim
receiver
nor
a
custodian
incurs
any
personal
liability
to
a
landlord
in
respect
of
his
occupation
of
leasehold
premises
of
a
debtor.
The
order
appointing
an
interim
receiver
in
no
way
divests
the
estate
of
the
debtor
and
he
continues
the
lessee
pending
the
interim
receiver's
possession.
An
interim
receiver
is
an
officer
of
the
Court
and
he
incurs
no
personal
liability
to
a
landlord
by
obeying
the
order
of
the
Court
in
taking
possession
of
the
demised
premises.
He
is
there
in
the
position
of
a
caretaker
or
policeman
or
sheriff;
but
if
he
chooses
to
enter
into
any
personal
contract
in
respect
of
the
demised
premises
that
would
be
a
different
matter
and
he
could
not
merely
because
he
was
an
interim
receiver
escape
liability
on
any
such
contract.
But
here
it
is
not
claimed,
or
suggested,
that
as
interim
receiver
he
entered
into
any
such
contract,
the
claim
on
the
contrary
is
based
solely
on
the
fact
that
he
occupied
the
premises;
but
for
all
that
appears
to
the
contrary
the
debtor
was
and
continued
to
be
the
legal
occupant
until
his
property
in
the
leasehold
was
divested
by
the
appointment
of
the
trustee.
After
the
making
of
the
receiving
order
the
property
of
a
debtor
is
by
sec.
6(3)
of
The
Bankruptcy
Act
[6
C.B.R.
23]
to
be
deemed
to
be
in
the
custody
of
the
Court,
but
it
cannot
be
pretended
that
the
Court
incurs
any
liability
to
a
landlord.
What
I
have
said
as
to
an
interim
receiver's
liability
applies
equally
to
the
custodian
who
stands
in
a
similar
position
to
that
of
the
interim
receiver—no
property
of
the
debtor
is
vested
in
him
and
he
no
more
incurs
any
personal
liability
to
a
landlord
than
would
a
watchman
or
caretaker
placed
in
possession
of
the
debtor's
property.
In
neither
case
is
there
any
privity
of
estate,
with
the
debtor,
because
as
I
have
said
in
neither
of
these
officers
is
the
debtor's
estate
vested.
When
the
trustee
is
appointed
the
case
is
different;
in
him
is
thenceforth
vested
the
debtor's
estate
in
the
leasehold
and
from
that
time
he
becomes
the
lessee
and
incurs
a
liability
for
the
rent
as
provided
by
the
provincial
Act
of
1924,
The
Landlord
and
Tenant
Act,
1924,
ch.
42,
but
until
the
appointment
of
the
trustee
takes
place
the
sole
liability
for
the
rent
remains
in
the
debtor.
in
all
of
the
above
cases,
the
courts
have
clearly
stated
that
the
property
of
the
debtor
does
not
vest
in
an
interim
receiver;
that
he
is
a
“watchman”,
caretaker",
policeman"
or"
sheriff".
His
function
is
to
preserve
the
assets
and
not
to
interfere
with
the
rights
of
the
debtor.
Although
it
is
recognized
that
it
is
essential
that
he
control
receipts,
he
should
not
interfere
with
the
debtor
carrying
on
business
in
the
usual
course.
it
was
the
evidence
of
Mr.
J.R.
Plaskett,
an
officer
of
the
appellant,
that
the
existing
bank
account
of
the
corporation
continued
to
be
used
and
funds
were
deposited
in
this
account
and
cheques
were
drawn
against
it
and
that
the
interim
receiver
was
added
as
a
co-signer
of
the
cheques
together
with
an
officer
of
the
corporation.
No
new
account
was
opened
over
which
the
interim
receiver
had
absolute
control.
The
appellant's
duty
under
the
order
appointing
it
was
to
oversee
and
control
receipts
and
disbursements
as
well
as
take
possession
of
the
property
of
the
corporation
and
what
better
way
to
oversee
disbursements
than
to
be
made
a
co-signer
of
cheques.
It
is
surely
the
only
way
the
Court
could
be
satisfied
that
the
corporation
was
not
expending
funds
contrary
to
its
order.
Mr.
Plaskett’s
evidence
was
clear
that
he
believed
that
he
was
limited
to
the
role
of
a
conservator
and
acted
accordingly;
that
he
could
not
make
business
decisions;
that
he
could
not
hire
or
fire
employees;
that
he
could
not
dispose
of
the
corporation's
assets
and
that
he
could
not
carry
on
the
corporation's
business.
As
to
the
payroll
procedure,
he
stated
that
the
corporation's
bookkeeper
prepared
all
cheques
in
a
net
amount
and
they
were
signed
by
a
signing
officer
of
the
corporation
and
presented
to
the
appellant
for
co-signature.
Even
though
he
was
aware
that
withholdings
and
remittances
were
necessary,
he
did
not
insist
on
cheques
being
issued
for
the
proper
withholdings.
Mr.
Plaskett
insisted
that
he
was
powerless
to
initiate
any
cheques
and
that
during
the
entire
period
of
the
interim
receivership,
he
never
initiated
one
cheque.
Mr.
Plaskett
denied
the
Minister's
assumptions
contained
in
the
reply
to
the
notice
of
appeal.
In
particular,
he
denied
that
he
administered,
managed
and
controlled
the
business
of
the
corporation.
He
stated
that
he
controlled
the
assets
and
receipts
only
to
conserve
them,
and
that
he
had
no
control
over
their
disposition.
He
denies
that
he
had
the
right
to
authorize
salaries
since
the
business
was
still
carried
on
by
the
corporation
and
that
he
did
not
sign
payroll
deduction
remittance
cheques
since
none
were
presented
for
signature.
Under
cross-examination,
Mr.
Plaskett
admitted
that
he
was
reluctant
to
sign
cheques
for
Ontario
retail
sales
tax
remittances
and
preferred
to
wait
and
see
the
outcome
of
the
hearing
for
the
receiving
order
which
he
believed
was
imminent.
The
issue
of
whether
the
appellant
administered,
managed,
distributed,
wound
up,
controlled
or
otherwise
dealt
with
the
property
business
estate
or
income
of
the
corporation
and
authorized
or
otherwise
caused
the
payment
of
salaries
and
wages
is
linked
to
whether
the
appellant
was
a
trustee
as
defined
in
subsection
153(1.4)
The
types
of
persons
enumerated
in
that
subsection
include
a
liquidator,
receiver,
receiver-manager,
trustee
in
bankruptcy,
assignee,
executor,
administrator,
sequestrator
or
person
performing
a
function
to
that
performed
by
such
person.
In
all
of
these
cases
such
a
person
is
one
who
is
either
vested
with
the
property
and
assets
of
the
debtor;
is
empowered
to
exclude
the
debtor
from
running
the
business;
is
empowered
to
take
possession
of
the
assets
to
the
exclusion
of
the
debtor;
or
is
empowered
to
sell
the
assets
of
the
debtor
and
to
pay
the
proceeds
to
the
creditor
for
whom
he
is
acting
or
for
the
benefit
of
all
creditors
as
in
the
case
of
a
trustee
in
bankruptcy.
Unlike
those
enumerated
persons
or
persons
performing
a
similar
function,
an
interim
receiver,
and
in
this
case
the
appellant,
was
not
entitled
to
carry
on
any
of
such
functions.
He
was
directed
and
ordered
by
the
Court
to
be
a
"watchman";
to
see
that
the
assets
of
the
corporation
were
not
dissipated
pending
the
hearing
of
the
petition
for
a
receiving
order.
He
was
specifically
instructed
not
to
interfere
with
the
carrying
on
of
the
corporation's
business.
Even
though
it
could
be
argued
that
the
interim
receiver
performed
some
of
the
functions
set
forth
in
subsection
153(1.3)
such
as
controlling
the
property
and
income
of
the
corporation,
it
did
not
do
so
in
the
capacity
of
a
trustee
as
defined
in
subsection
153(1.4)
and
accordingly,
the
charging
provisions
of
subsection
153(1.3)
are
not
applicable
in
these
circumstances.
Accordingly,
the
appeal
is
allowed
with
costs
and
the
assessment
is
hereby
vacated.
Appeal
allowed.
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