AUDETTE,
J.:—This
is
an
amended
information
exhibited
by
the
Attorney-General
of
Canada
to
recover
from
the
above
defendant,
by
priority,
the
sum
of
$760.66
as
representing
the
amount
of
income
war
tax
due
by
him
for
the
year
1917.
The
defendant,
although
duly
served
with
the
original
information
has
made
default
in
filing
any
statement
in
defence
but
appeared
by
counsel
on
the
issues
raised
by
the
amended
information,
at
the
hearing
on
the
5th
instant.
The
assignee
was
added
as
defendant
herein
and
from
his
affidavit,
to
which
is
attached
a
copy
of
the
resolution
authorising
him
to
contest
the
Crown’s
claim
to
priority,
it
now
appears
that
the
creditors
are
duly
represented
in
the
present
proceedings.
The
amount
for
which
judgment
is
asked
is
not
contested,
the
only
controversy
arising
herein
is
as
to
whether
the
amount
of
income
tax
due
by
defendant
is
to
be
paid
in
full
in
priority
to
all
other
creditors
of
equal
degree
who
are
herein
represented
by
Assignee
Cole
(sec.
9).
As
stated
by
Lord
Watson
in
The
Lequidators
of
the
Maritime
Bank
of
Canada
v.
Receiver
General
of
New
Brunswick
[1892]
A.C.
487
at
441
:
"
"
The
Supreme
Court
of
Canada
had
previously
ruled,
in
Reg.
v.
Bank
of
Nova
Scotia
(1885)
11
Can.
8.C.R.
1,
that
the
Crown,
as
a
simple
contract
creditor
for
public
moneys
of
the
Dominion
deposited
with
a
provincial
bank,
is
entitled
to
priority
over
other
creditors
of
equal
degree.
The
decision
appears
to
their
Lordships
to
be
in
strict
accordance
with
constitutional
law.”
Unless
this
priority
to
which
the
prerogative
attaches
in
favour
of
the
Crown
has
been
taken
away
by
competent
statutory
authority,
I
must
find
it
is
still
good
law.
Much
more
so,
indeed,
where
it
is
not
only
in
connection
with
an
ordinary
chirographic
claim,
but
in
respect
of
a
claim
for
taxes—income
taxes.
I
am
unable
to
follow
the
contention
asserted
at
Bar
on
behalf
of
the
assignee
that
the
Assignments
and
Preferences
Act,
R.S.O.
1114,
ch.
134,
established
that
all
creditors
must
be
collocated
pari
passu
or
on
a
basis
of
equality,
and
that
the
assignment
by
the
insolvent
takes
away
any
priority
any
claim
might
have
had.
In
the
first
place,
this
Ontario
Act
could
not,
ex
proprio
vigore,
take
away
or
abridge
any
privilege
of
the
Crown
in
the
right
of
the
Dominion.
The
distribution
is
made
under
a
provincial
statute
that
cannot
affect
the
rights
of
the
Federal
Crown.
Gauthier
v.
The
King
(1918)
40
D.L.R.
353,
56
Can.
S.C.R.
176,
per
Anglin,
J.
Then
the
argument,
on
behalf
of
the
assignee,
seems
to
confuse
an
assignment
in
the
nature
of
a
conveyance
with
the
assignment
contemplated
by
the
Act,
which
is
for
the
express
benefit
of
the
creditors—the
Act
itself,
by
sec.
5,
recognising
privileges.
What
might
have
given
rise
to
the
contention
offered
on
behalf
of
the
assignee
in
refusing
the
priority
sought
by
these
proceedings
is
the
decision
of
the
Courts
of
Ontario
in
Clarkson
v.
AWy-Gen
9
l
of
Canada
(1888)
15
O.R.
632;
(1889)
16
A.R.
(Ont.)
202;
but
the
authority
of
that
decision
has
now
been
impaired
by
the
decision
of
His
Majesty’s
Committee
of
the
Privy
Council
in
Re
New
South
Wales
Taxation
Commissioners
v.
Palmer
[1907]
A.C.
179
at
185,
wherein
it
is
said:
"‘The
attention
of
their
Lordships
was
called
to
the
case
of
Re
Baynes
(1898)
9
Queensland
L.J.,
33,
at
p.
44,
which
has
already
been
mentioned,
and
a
case
in
Ontario,
Clarkson
v.
Att’y-Gen’l
of
Canada,
15
O.R.
632;
16
A.R.
(Ont.)
202,
in
both
of
which
the
right
of
the
Crown
to
preferential
payment
out
of
assets
being
administered
in
bankruptcy
was
denied.
Their
Lordships
have
carefully
considered
those
cases.
With
every
respect
to
the
Courts
by
which
they
were
decided,
their
Lordships
cannot
help
thinking
that
in
both
cases
the
Judges
have
not
sufficiently
kept
distinct
the
two
prerogatives
which
formed
separate
grounds
of
decision
in
In
re
Henley
&
Co.
(1878)
9
Ch.
D.
469.
The
judgments
are
devoted
in
a
great
measure
to
a
consideration
of
the
prerogative
under
which
the
Crown
was
entitled
to
peculiar
remedies
against
the
debtor
and
his
property,
and
of
the
law
and
the
authorities
bearing
upon
it.
The
principle
upon
which
that
prerogative
depends
is
not
to
be
confounded
with
the
principle
invoked
in
the
present
case.
The
prerogative,
the
benefit
of
which
the
Crown
is
now
claiming,
depends,
as
explained
by
Macdonald,
C.B.,
in
The
King
v.
Wells
(1807)
16
East
278
note,
104
E.R.
1094,
upon
a
principle
‘perfectly
distinct
.
.
.
and
far
more
general
determining
a
preference
in
favour
of
the
Crown
in
all
cases
and
touching
all
rights
of
what
kind
soever
where
the
Crown’s
and
the
subject’s
right
concur
and
so
come
into
competition.”
In
Att^y-Gen
9
!
for
N.S.
Wales
v.
Curator
of
Intestate
Estates
[1907]
A.C.
519,
it
was
held
that
the
Insurance
Act
therein
mentioned
did
not
bind
the
Crown
which
was
entitled
to
be
paid
by
virtue
of
its
prerogative
in
priority
to
all
other
creditors
of
the
deceased.
The
case
of
Sykes
v.
Soper
(1913)
14
D.L.R.
497,
29
O.L.R.
195,
was
also
mentioned
at
Bar
but
has
no
importance
here
in
view
of
the
above
decision
in
the
Palmer
case,
[1907]
A.C.
179.
The
decision
in
In
re
Henley
c
Co.
(1878)
9
Ch.
D.
461,
above
referred
to,
decided
that
when
a
company
is
being
wound
up
the
Crown
has
a
right
to
payment
in
full
of
a
debt
due
from
the
company
for
property
tax
before
commencement
of
the
winding
up,
in
priority
to
the
other
creditors.
See
also
Re
Oriental
Bank
Corp.
(1884)
28
Ch.
D.
643.
Then
in
In
re
Laycock
[1919]
1
Ch.
241,
also
decided
that
sec.
33
of
Bankruptcy
Act,
4-5
Geo.
V
1914,
ch.
59,
which
after
giving
statutory
priority
to
certain
Crown
and
other
debts
in
the
distribution
of
a
bankrupt’s
or
deceased
insolvent’s
property,
provides
that
subject
thereto
all
debts
shall
be
paid
pari
passu,
does
not
apply
to
the
private
administration
of
a
deceased
insolvent’s
estate
out
of
Court,
and
therefore
does
not
affect
the
common
law
priority
of
any
Crown
debt
in
such
a
case.
In
In
re
Galvin
[1897]
1
Ir.
R.
520,
it
was
held
that
the
Crown
was
entitled
to
priority
in
respect
of
legacy
duties.
A
number
of
authorities
in
support
of
this
view
will
also
be
found
in
Robertson
on
Civil
Proceedings,
1908
ed.,
pp.
164
et
seq.
The
Canadian
Income
War
Tax
Amendment,
10-11
Geo.
V
1920,
ch.
49,
sec.
10,
subsec.
9,
further
provides
that
in
cases
wherein
assignees,
etc.,
are
administering
and
distributing
estates
etc.,
they
shall
pay
any
tax
and
surtax
and
penalties
assessed
and
levied
in
respect
thereto
before
making
any
distribution
of
the
said
property,
business
or
estate.
The
Act
thereby
recognises
and
preserves
the
priority,
if
the
tax
has
to
be
paid
before
distribution
is
made.
Moreover,
statutes
made
for
the
benefit
of
the
Crown
must
be
beneficially
construed,
27
Hals.,
p.
166,
para.
317.
Income
tax
owing
to
the
Crown
has
priority
over
all
other
unsecured
debts,
16
Hals.,
p.
684,
para.
1394.
The
rule
of
law
formulated
in
the
maxim
quando
jus
domini
et
subditi
concurrunt,
jus
régis
praeferri
debet,
cited
by
Strong,
J.,
in
The
Queen
v.
Bank
of
Nova
Scotia,
11
Can.
S.C.R.
19
and
approved
of
in
the
case
of
The
Liquidators
of
the
Maritime
Bank
v.
Receiver
General
of
N.B.
[1892]
A.C.
487,
has
still
full
force
and
effect
and
must
be
followed.
Therefore
there
will
be
judgment
condemning
the
defendant
Lithwick
to
pay,
as
prayed,
the
sum
of
$760.66
with
interest
and
costs,
and
ordering
the
added
defendant
Cole,
in
his
capacity
of
assignee,
as
aforesaid,
to
pay
the
same
to
the
plaintiff
in
full
priority
to
all
ereditors
of
equal
degree
of
the
said
defendant
Lithwick.
Judgment
accordingly.
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