Zuber,
J.A.
(Blair
and
Griffiths,
JJ.A.
concurring)
(orally):
—In
1986
Her
Majesty
the
Queen
filed
a
claim
as
a
preferred
creditor
against
the
bankrupt
estate
of
Albert
John
Norris.
The
claim
was
disallowed
by
the
trustee
in
bankruptcy.
The
Crown
appealed
unsuccessfully
to
the
Deputy
Registrar
in
Bankruptcy
and
again
without
success
to
Anderson,
J.
The
Crown
now
appeals
to
this
court.
The
facts
which
underlie
the
issue
in
this
case
may
be
shortly
stated.
In
1984
the
Crown
issued
a
notice
of
assessment
for
$9,960.93
against
542175
Ontario
Limited
for
failure
to
remit
taxes
and
unemployment
insurance
commission
premiums
payable
by
the
numbered
company
as
source
deductions
on
behalf
of
its
employees.
Pursuant
to
subsection
227.1(1)
of
the
Income
Tax
Act
Albert
Norris
as
a
Director
of
the
numbered
company
was
jointly
and
severally
liable
with
the
numbered
company
for
the
assessed
amount.
On
July
26,
1986
Albert
Norris
made
an
assignment
in
bankruptcy.
Subsequently,
the
Crown
filed
proof
of
claim
with
the
trustee
in
the
sum
of
$9,960.93.
The
Crown
also
issued
a
notice
of
assessment
in
the
same
amount
against
the
bankrupt
pursuant
to
subsection
227(10)
of
the
Income
Tax
Act.
The
trustee
was
not
satisfied
with
the
notice
of
claim
filed
by
the
Crown
and
asked
for
more
information.
In
response
to
this
request
the
Crown
supplied
the
trustee
with
the
notice
of
assessment
directed
to
the
bankrupt
Albert
Norris.
The
trustee
was
still
not
satisfied
and
asked
for
"the
working
papers"
that
Revenue
Canada
auditors
had
prepared
to
establish
the
amounts
owing
by
542175
Ontario
Limited.
Neither
the
working
papers
nor
any
further
detail
was
furnished
to
the
trustee
and
the
claim
of
the
Crown
was
disallowed.
The
Deputy
Registrar
with
whom
Anderson,
J.
agreed
held
that
the
proof
of
claim
and
the
notice
of
assessment
were
not
sufficient
for
the
trustee
to
discharge
his
statutory
duty
and
that
total
disallowance
of
the
claim
was
appropriate.
With
great
respect
to
that
view,
we
disagree.
In
our
view
it
was
within
the
power
of
the
trustee
to
call
for
evidence
to
support
the
proof
of
claim.
However,
the
request
of
the
trustee
was
fully
answered
by
the
notice
of
assessment.
Subsection
152(8)
of
the
Income
Tax
Act
provides
as
follows:
(8)
An
assessment
shall,
subject
to
being
varied
or
vacated
on
an
objection
or
appeal
under
this
Part
and
subject
to
a
reassessment,
be
deemed
to
be
valid
and
binding
notwithstanding
any
error,
defect
or
omission
therein
or
in
any
proceeding
under
this
Act
relating
thereto.
A
taxpayer
who
objects
to
an
assessment
may
file
a
notice
of
objection
pursuant
to
subsection
165(1)
of
the
Income
Tax
Act
and
if
necessary
proceed
to
exercise
rights
of
appeal
to
the
Tax
Court
and
to
the
Federal
Court.
When
the
trustee
in
bankruptcy
wishes
to
question
the
validity
of
an
assessment
against
a
bankrupt
he,
like
anyone
else,
must
seek
his
remedy
within
the
Income
Tax
Act;
see
In
Re
Carnat
Construction
Company
Limited
(1958),
37
C.B.R.
47
and
Re
Selkirk
(No.
2)
(1972),
17
C.B.R.
(N.S.)
302.
To
hold
that
the
trustee
in
bankruptcy
can
disallow
an
assessment
made
pursuant
to
the
Income
Tax
Act
would
be
tantamount
to
clothing
the
trustee
with
the
powers
of
the
Tax
Court.
No
interpretation
of
the
Bankruptcy
Act
can
support
such
a
conclusion.
In
the
result,
the
appeal
is
allowed
and
the
disallowance
is
set
aside
and
the
trustee
in
bankruptcy
is
directed
to
allow
the
claim
filed
by
the
Crown.
Such
allowance
of
the
claim
is
however
without
prejudice
to
the
right
of
the
trustee
in
bankruptcy
to
proceed
with
any
right
he
may
have
under
the
Income
Tax
Act.
We
are
told
the
trustee
has
filed
a
notice
of
objection
to
the
assessment.
There
will
be
no
order
with
respect
to
costs
of
this
appeal
or
the
appeal
before
Anderson,
J.
Appeal
allowed.
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