The
Court,
having
heard
the
parties
and
deliberated;
Seeing
:
The
trustee
prays
for
direction
as
to
the
nature
of
the
claim
of
the
Department
of
National
Revenue.
The
claim
is
for
moneys
that
would
have
been
retained
by
debtor
out
of
its
employees’
pay
under
the
War
Revenue
Act.
The
parties
admit
:
"
4
That
the
bankrupt
in
order
to
finance
its
payroll,
borrowed
from
the
bank
the
moneys
required
to
effect
payment
of
the
net
amount
payable
to
each
employee”.
The
contention
submitted
by
the
trustee
is
that
the
debtor
under
the
circumstances,
did
not
collect
the
taxes
for
the
Crown
and
that
he
is
not
accountable
but
only
subject
to
a
penalty.
The
Crown
claims
that
he
is
and
that
it
is
privileged.
The
trustee’s
contention
is
not
to
be
sustained.
The
fact
that
a
party
pays
his
employees
with
borrowed
funds
is
immaterial.
In
the
absence
of
the
income
tax
law,
the
debtor
would
have
paid
his
employees
in
full
and
therefore,
in
paying
the
wages
less
the
deduction
required
by
law,
he
retained
the
amount
of
the
tax.
Most
contractors
and
manufacturers
are
financed
by
a
bank
and
obtain
money
therefrom
to
pay
their
employees,
which
they
repay
when
they
are
paid
themselves
for
the
best
part
on
completion
of
the
job
as
regards
contractor
and
upon
the
sale
of
the
manufactured
goods
in
the
latter
case.
To
admit
the
trustee’s
contention
would
put
contractors
and
manufacturers
and
their
employees
outside
the
operation
of
the
law,
whereas
the
law
applies
to
all
employers.
It
is
true
the
debtor
did
not
put
the
money
aside
as
required
by
law,
but
he
was
obliged
to
retain
it
or
collect
for
the
Crown
and
so
he
did
and
is
accordingly
accountable
thereof,
(section
92,
paragraph
2).
As
to
the
nature
of
the
claim,
these
moneys
are
to
be
paid
in
priority
to
all
other
debts
and
consequently
the
claim
is
privileged,
(section
92,
paragraph
7).
WHEREFORE:
DotH
ADVISE
the
trustee
that
the
claim
in
question,
not
only
should
be
allowed
but
collocated
as
a
privileged
claim.
(SIGNED)
Louis
BOYER,
J.S.C.
Email this Content