Grant,
DJ:—The
plaintiff
lives
in
the
municipality
of
Rexdale.
In
the
year
1958
he
and
his
brother
Nicola
DiLorenzo
entered
into
partnership
under
the
name
and
style
of
Di
Lorenzo
Construction
Company
and
thereafter
carried
on
business
together
in
such
partnership
in
the
trade
of
general
forming,
concrete
work
and
steel
placing.
In
such
business
and
partnership
the
plaintiff
was
in
charge
of
the
actual
performance
of
all
work
or
contracts.
The
brother
Nicola
was
responsible
for
all
matters
pertaining
to
the
office
and
management
of
the
partnership
including
arranging
contracts,
collections
and
payment
of
all
obligations
thereof.
For
the
purpose
of
carrying
on
such
business,
the
plaintiff
and
his
said
brother
caused
to
be
incorporated
a
number
of
companies,
including
the
nine
mentioned
in
paragraph
3
of
the
Statement
of
Defence.
They
were
substantial
shareholders
and
officers
in
most
of
these
incorporated
companies
which
were
under
their
complete
control
and
direction
in
the
carrying
on
of
such
business
on
behalf
of
such
partnership.
The
offices
of
such
partnership
were
at
76
Millwich
Drive,
Weston,
Ontario.
Other
than
one
of
such
companies
which
operated
from
premises
in
Ottawa
and
another
which
operated
in
Hamilton,
the
other
incorporated
companies
occupied
the
same
office
space
as
such
partnership.
Such
partnership,
as
well
as
the
same
incorporated
companies,
hired
a
considerable
number
of
employees.
It
was
the
duty
of
each
employer
to
deduct
monthly
from
the
wages
of
each
of
its
employees,
an
amount
sufficient
to
cover
that
employee’s
income
tax
on
such
wages,
as
well
as
his
contribution
to
the
Canada
Pension
Plan
and
to
forward
the
same
to
the
Department
of
National
Revenue
on
or
before
the
15th
day
of
the
following
month.The
Income
Tax
Act
provides
that
the
employer
holds
such
amount
in
trust
for
such
department
until
the
same
is
forwarded
to
it.
In
the
early
part
of
1968
the
plaintiff
and
his
said
brother,
carrying
on
such
business
as
DiLorenzo
Construction
and
such
incorporated
companies,
became
indebted
to
such
department
in
the
sum
of
$259,952.34
representing
employee
tax
deductions,
Canada
Pension
Plan
contributions,
assessed
arrears,
penalties
and
interest
which
they
had
failed
to
remit.
The
plaintiff
and
his
brother
Nicola
entered
into
an
arrangement
with
the
department
whereby
they
undertook
and
agreed
to
pay
such
indebtedness
in
regular
specified
payments
so
that
the
total
indebtedness
would
be
retired
by
April
1,
1968.
The
terms
of
such
arrangement
is
set
out
in
a
letter
from
the
partnership
to
such
department
dated
February
14,
1968
and
found
under
Tab
16
of
Exhibit
2
herein.
Although
such
indebtedness
was
entirely
satisfied,
the
terms
of
this
guarantee
are
enlightening
as
to
the
subsequent
arrangements.
It
reads
as
follows:
February
14,
1968.
Director
—
Taxation,
Department
of
National
Revenue,
36
Adelaide
Street
East,
Toronto
1,
Ontario.
Attention:
DR
R
Price,
Advance
Collection
Unit.
Dear
Sirs:
|
Re:
|
Employee
Tax
Deduction
Arrears
of:
|
|
|
N
DiLorenzo
Construction
Ltd
|
Acc’t
#DCO
4-0166-5
|
|
Dilcon
Construction
Ltd
|
Acc’t
#DCO
4-0149-1
|
|
Dilcrane
Eqipment
Limited
|
Acc’t
#DEQ
4-0004-1
|
|
Etobicoke
Forming
Limited
|
Acc’t
#EFO
4-0019-8
|
|
Frank
Forming
Ltd
|
Acc’t
#EFO
4-0020-5
|
|
Forming
Construction
Limited
|
Acc’t
#FCO
4-0107-7
|
|
—
and
—
|
|
|
Mr
Nicola
DiLorenzo
and
Mr
John
DiLorenzo
|
|
|
trading
as
DiLorenzo
Construction
|
|
|
Acc’t
#DCO
4-0180-6
|
|
|
The
above
six
Companies,
together
with
the
partnership
of
DiLorenzo
Construc
|
tion
are
currently
indebted
to
the
Department
of
National
Revenue
in
the
amount
of
$259,952.34
representing
employee
Tax
Deduction
and
Canada
Pension
Plan
Contribution
assessed
arrears,
penalty
and
interest.
Repayment
of
the
entire
amount
due,
including
any
additional
interest
accruing
in
the
interval,
is
hereby
undertaken,
agreed
to
and
guaranteed
by
Mr
Nicola
DiLorenzo
and
Mr
John
DiLorenzo
trading
as
DiLorenzo
Construction
as
follows:
(a)
an
amount
not
less
than
$70,000.00
by
certified
cheque
on
February
19th,
1968.
(b)
an
amount
not
less
than
$30,000.00
by
certified
cheque
on
each
of
the
following
dates,
namely
February
26,
1968,
March
4,
1968,
and
March
11,
1968.
(c)
an
amount
not
less
than
$35,000.00
by
certified
cheque
on
March
18,
1968
and
March
25,
1968.
(d)
an
amount
sufficient
to
retire
the
entire
balance
of
all
outstanding
arrears,
penalty
and
interest,
(approximately
$35,000.00)
by
certified
cheque
on
April
1,
1968.
It
is
further
hereby
understood
and
agreed
that
the
entire
liability
of
the
six
Limited
Companies
referred
to
shall
be
repaid
in
full,
and
in
preference
to,
any
reduction
on
account
of
the
liability
of
the
partnerhip
of
DiLorenzo
Construction.
Payment
of
the
February,
1968
current
month
employees
deductions,
for
all
seven
accounts,
will
be
provided
by
certified
funds
on
March
11,
1968,
concurrent
with
the
$30,000.00
arrears
payment
due
on
the
same
date.
In
the
event
of
any
break
down
in
the
above
arrangement
and/or
repayment
schedule
will
render
all
arrears
due
and
payable
immediately,
and
it
is
fully
understood
that
the
Department
may
initiate
whatever
legal
action
they
may
deem
necessary
without
further
notice
or
advice.
Yours
truly,
“N
Dilorenzo”
N
DiLorenzo
—
Partner.
ND/lm
c.c.
Mr
P
Weinstein,
Aetna
Factors
Corp’n
Ltd,
1320
Yonge
St,
Toronto
7,
Ontario.
In
the
latter
part
of
1968
and
1969
the
business
developed
financial
troubles
and
again
both
the
partnership
and
the
nine
incorporated
companies
named
in
paragraph
3
of
the
Statement
of
Defence
failed
to
remit
to
the
department
a
large
part
of
their
employee
tax
deductions
and
Canada
Pension
Plan
payments
for
their
employees.
The
combined
indebtedness
of
the
eight
incorporated
companies,
namely
Forming
Construction
Limited;
Del-
con
Construction
Limited;
Toronto
Forming
(1965)
Limited;
T
A
&
Steel
Placing
Limited;
Hamilton
Forming
Limited;
Dilcrane
Equipment
Limited;
Corvette
Forms
Limited;
N
DiLorenzo
Construction
Limited,
together
with
that
of
the
partnership,
amounted
to
$435,862.63.
Fred
Fraser
a
supervisor
of
the
technical
collections
section
of
the
Department
of
National
Revenue
who
was
closely
associated
with
the
attempts
at
collection
stated
it
was
most
important
that
the
arrangements
provide
that
all
payments
made
should
be
credited
against
the
amount
owing
by
the
limited
companies
until
that
indebtedness
was
satisfied
because
of
the
danger
of
the
limited
corporation
ceasing
to
exist
or
be
without
assets.
Consequently,
it
was
arranged
that
any
payments
made
should
be
credited
against
the
amount
owing
by
the
limited
companies
until
that
was
paid.
While
Fraser
was
not
present
at
the
actual
time
the
arrangements
were
made,
he
had
sufficient
knowledge
from
the
records
of
the
companies
and
the
department
and
his
constant
Supervision
of
the
attempts
at
collection,
to
know
that
this
had
been
agreed
upon.
Donald
R
Price
was
a
senior
officer
of
the
Income
Tax
Collection
Department.
He
has
supervision
over
the
collections
from
this
group
of
companies
and
the
partnership
from
late
in
1967.
He
said
that
by
late
August
of
1968
that
the
group
was
in
substantial
arrears
again.
Notice
of
the
assessment
of
the
arrears
were
sent
to
the
companies
in
default
each
month.
These
amounts
were
prepared
by
Price
from
records
and
books
produced
by
the
different
companies
and
partnership
as
to
the
amount
of
deductions
made
from
the
employees’
pay
each
month.
The
brother
Nicola
had
made
many
promises
that
the
amounts
so
owing
would
be
remitted
but
the
amounts
in
arrears
steadily
increased
to
about
$400,000
by
the
end
of
December.
Price
was
then
instructed
by
the
chief
of
such
collection
department
to
insist
on
payment
of
$100,000
immediately
or
drastic
action
would
be
taken.
Nicola
DiLorenzo
then,
on
behalf
of
all
the
limited
companies
and
the
partnership,
agreed
that
they
would
jointly
assume
liability
for
such
total
indebtedness
which
was
then
$435,862.63
and
pay
the
same
at
the
rate
of
$15,000
per
week
during
the
month
of
April;
$20,000
per
week
in
May;
$30,000
per
week
in
June
and
$40,000
per
week
in
July
and
the
balance
on
July
31,
1969.
It
was
arranged
that
all
payments
made
under
such
arrangement
were
to
be
credited
against
the
arrears
owing
by
the
limited
companies
until
that
liability
was
satisfied
and
thereafter
payments
would
be
credited
against
the
amount
owing
by
the
partnership.
The
Chief
of
Collections
for
the
department
accepted
this
offer.
The
solicitors
for
the
partnership
and
incorporated
companies
drew
up
the
form
of
agreement
embodying
these
terms
and
by
letter
dated
March
3,
1969
(Tab
1,
exhibit
2)
sent
the
same
to
Mr
Price.
Such
letter
and
agreement
read
as
follows:
March
3,
1969.
D
R
Price,
Esq,
Mackenzie
Building,
36
Adelaide
Street
East,
Toronto
1,
Ontario.
Dear
Mr
Price:
Re:
DiLorenzo
Company
—
Liabilities
and
Department
of
National
Revenue
As
requested,
we
have
prepared
the
form
of
guarantee
basically
on
your
form
with
respect
to
the
moneys
owing
by
the
DiLorenzo
Group
of
Companies
and
by
Di
Lorenzo
Construction
Company
on
account
of
Employees’
Tax
Deductions,
Canada
Pension
Plan
Contributions,
penalties
and
interest.
A
copy
of
such
guarantee
is
enclosed
herewith.
We
understand
that
you
will
make
certain
that
this
guarantee
is
in
proper
form
advise
us,
in
which
event,
we
will
arrange
to
have
the
guarantee
signed
by
all
of
the
various
companies
and
individuals.
The
writer
will
be
out
of
the
City
until
March
15th,
1969,
but
if
you
would
care
to
contact
the
writer’s
secretary,
Mrs
Scaussmann,
she
will
arrange
for
the
execution
of
the
document.
We
regret
a
slight
delay
in
forwarding
this
material
to
you,
due
to
pressure
of
business.
Yours
truly,
COBBAN,
WOOLLEY
&
DALE,
By:
W
A
Cobban
Per
I.S.
WAS:
IS
Ends.
Department
of
National
Revenue,
Taxation
Division,
36
Adelaide
Street
East,
Toronto
1,
Ontario.
Dear
Sirs:
|
GUARANTEE
|
|
Re:
|
Forming
Construction
Limited
|
|
Dilcon
Construction
Limited
|
|
Toronto
Forming
(1965)
Limited
|
|
T
A
&
Steel
Placing
Limited
|
|
Hamilton
Forming
Limited
|
|
Dilcrane
Equipment
Limited
|
|
Corvette
Forms
Limited
|
|
N
DiLorenzo
Construction
Limited
|
|
DiLorenzo
Construction
Company
|
|
(hereinafter
called
the
“Debtors”)
|
WHEREAS
the
Debtors
are
indebted
to
you
in
the
sum
of
Four
Hundred
and
Thirty-Five
Thousand
Eight
Hundred
and
Sixty-Two
Dollars
and
Sixty-Three
Cents
($435,862.63)
of
lawful
money
of
Canada,
consisting
of
Employees’
Tax
Deductions,
Canada
Pension
Plan
contributions,
penalties
and
interest
payable
under
the
Income
Tax
Act
and
Regulations
and
the
Canada
Pension
Plan
Act,
as
shown
by
the
statement
of
account
hereto
annexed
and
marked
Exhibit
“A”;
and
WHEREAS
each
of
the
undersigned
is
desirous
of
providing
a
guarantee
for
the
said
sum
of
Four
Hundred
and
Thirty-Five
Thousand
Eight
Hundred
and
Sixty-
Two
Dollars
and
Sixty-Three
Cents
($435,862.63)
plus
interest
at
the
rate
of
10%
per
annum
on
the
sum
of
$367,471.72;
and
WHEREAS
this
guarantee
is
made
in
your
favour
pursuant
to
an
arrangement
with
the
Minister
of
National
Revenue
(hereinafter
called
the
“Minister”)
in
accordance
with
sub-section
4
of
Section
116
of
the
Income
Tax
Act
and
sub-section
2
of
Section
24
of
the
Canada
Pension
Plan
Act',
and
PROVIDED
that
this
guarantee
is
to
be
void
only
on
full
payment
of
the
said
Employees’
Tax
Deductions,
Canada
Pension
Plan
Contributions,
Penalties
and
interest;
and
PROVIDED
that
this
guarantee
is
given
and
accepted
as
security
for
the
due
payment
of
the
said
Employees’
Tax
Deductions,
Canada
Pension
Plan
Contributions,
penalties
and
interest
and
shall
in
no
case
be
a
substitution
for
nor
a
replacement
of
the
said
liability
for
the
said
Employees’
Tax
Deductions,
Canada
Pension
Plan
Contributions,
penalties
and
interest
and
shall
in
no
way
replace,
substitute
nor
derogate
from
any
of
the
rights
or
method
of
collection
of
the
said
Employees’
Tax
Deductions,
Canada
Pension
Plan
Contributions,
penalties
and
interest
which
you
may
have
or
have
had
at
law
or
in
equity
prior
to
the
acceptance
of
this
guarantee.
NOW
THEREFORE
in
consideration
of
these
presents
and
other
good
and
valuable
consideration,
the
undersigned
do
covenant,
promise
and
agree
in
favour
of
the
Minister
as
follows:
1.
The
undersigned
hereby
guarantee
payment
of
the
full
amount
of
Employees’
Tax
Deductions,
Canada
Pension
Plan
Contributions,
penalties
and
interest
payable
by
the
Debtors
as
set
out
in
Exhibit
“A”
atttached
hereto
at
the
following
times
and
in
the
following
amounts
promptly
on
demand
made
to
me
by
or
on
behalf
of
the
Minister
and
whether
or
not
any
one
of
the
undersigned
are
previously
stated
to
be
responsible
for
all
or
any
part
of
said
amounts:
On
each
of
the
4th,
11th,
18th
and
25th
days
of
April,
1969
—
$15,000.
On
each
of
the
2nd,
9th,
16th
and
23rd
days
of
May,
1969
—
$20,000.
On
each
of
the
6th,
13th,
20th
and
27th
days
of
June,
1969
—
$30,000.
On
each
of
the
4th,
11th
and
18th
days
of
July,
1969
—
$40,000.
The
balance
of
the
moneys
owing
on
the
31st
day
of
July,
1969.
As
between
the
Minister
and
the
guarantors,
the
guarantors
are
and
shall
continue
to
be
liable
as
the
principle
debtor
not
withstanding
any
transaction
which
may
take
place
between
the
Minister
and
the
Debtors
or
any
neglect
of
default
of
the
Minister
which
might
otherwise
operate
as
a
discharge
whether
partial
or
absolute
of
the
guarantors
if
they
were
surety
only
of
the
Debtors
and
without
restricting
the
generality
of
the
foregoing
notwithstanding
the
release
in
whole
or
in
part
of
any
properties
and
assets
mortgaged
or
charged
as
security
by
the
debtors,
or
the
granting
of
time
or
other
indulgencies
to
the
Debtors.
3.
The
Minister
in
his
absolute
discretion
or
in
the
absolute
discretion
of
any
officer
or
agent
that
he
may
designate,
and
without
diminishing
the
liability
of
the
guarantors
may
grant
time
or
other
indulgencies
to
the
Debtors
and
any
other
person
or
persons
now
or
hereafter
liable
to
the
Minister
in
respect
of
the
aforesaid
Employees’
Tax
Deductions,
Canada
Pension
Plan
Contributions,
penalties
and
interest
and
may
take,
give
up,
modify,
vary,
exchange,
renew
or
abstain
from
perfecting
or
taking
advantage
of
any
security
in
whole
or
in
part
and
may
discharge
any
part
or
parts
or
accept
any
composition
or
arrangements
or
realize
upon
any
security
when
and
in
such
manner
as
the
Minister
or
any
officer
or
agent
he
may
designate
may
think
expedient
and
in
no
case
shall
the
Minister
be
responsible
for
any
neglect
or
omission
with
respect
to
any
such
security.
The
guarantors
renounce
all
benefits
of
discussion
and
division.
4.
The
Minister
shall
not
be
bound
to
exhaust
his
resources
aginst
the
Debtors
or
other
parties
or
any
securities
he
may
hold
enforce
the
various
remedies
available
to
him
and
may
realize
upon
any
securities
held
by
him
or
any
part
thereof
in
such
order
as
the
Minister
may
determine.
5.
It
is
further
hereby
expressly
declared
that
the
release
of
any
of
the
guarantors
from
his
or
their
liability
in
this
cause
shall
not
affect
the
liability
of
the
remaining
guarantor
or
guarantors
which
shall
remain
unimpaired
and
still
in
full
force
and
effect
as
if
the
guarantor
or
guarantors
so
released
had
not
been
a
guarantor
of
the
said
Employees’
Tax
Deductions,
Canada
Pension
Plan
Contributions,
penalties
and
interest
or
any
part
thereof.
6.
Upon
default
in
payment
of
any
amount
payable
by
the
Debtors
to
the
Minister
at
the
time
agreed
as
set
out
above,
the
Minister
may
treat
the
whole
of
the
indebtedness
hereby
secured
as
due
and
payable
and
may
forthwith
collect
from
the
guarantors
the
total
amount
hereby
guaranteed.
7.
This
guarantee
shall
be
binding
upon
the
heirs
and
executors
and
assigns
of
the
guarantors
and
shall
ensure
to
be
benefit
of
the
Minister,
his
successors
and
assigns
as
if
they
had
throughout
been
expressly
named
herein.
IN
WITNESS
whereof
the
parties
hereto
have
executed
this
agreement
as
of
the
day
of
March,
1969.
SIGNED,
SEALED
AND
DELIVERED
)
FORMING
CONSTRUCTION
LIMITED
in
the
presence
of:
)
)
By
)
)
)
DILCON
CONSTRUCTION
LIMITED
)
)
By
)
)
)
TORONTO
FORMING
(1965)
LIMITED
)
)
By
)
)
)
T
&
A
STEEL
PLACING
LIMITED
)
)
By
)
)
)
HAMILTON
FORMING
LIMITED
)
)
By
)
)
DILCRANE
EQUIPMENT
LIMITED
By
CORVETTE
FORMS
LIMITED
By
N
DiLORENZO
CONSTRUCTION
LIMITED
By
DiLORENZO
CONSTRUCTION
By
Nick
Di
Lorenzo
By
John
DiLorenzo
EXHIBIT
“A”
|
Interest
|
|
|
CPP
Con-
|
|
To
Dec.
|
|
|
Corporation
|
Year
|
Year
|
Deductions
|
tri
but
io
ns
|
Penalty
|
26,
1968
|
Total
|
|
Forming
Construc
|
|
|
tion
Limited
|
|
1968
|
$39,361.60
|
$7,220.28
|
$4,658.18
|
$401.02
|
$51,641.08
|
|
Toronto
Forming
|
|
|
(1965)
Limited
|
|
1968
|
14,029.35
|
2,645.50
|
1,667.47
|
136.70
|
18,479.02
|
|
T
&
A
Steel
Plac-
|
|
|
ing
Limited
|
|
1968
|
45,869.91
|
8,425.30
|
5,429.51
|
446.42
|
60,171.14
|
|
Dilcrane
Equipment
|
|
|
Limited
|
|
1968
|
4,498.70
|
1,042.52
|
554.12
|
27.84
|
6,123.10
|
|
Corvette
Forms
|
|
|
Limited
|
|
1968
|
13,158.14
|
2,568.70
|
1,572.68
|
130.78
|
17,430.40
|
|
N
DiLorenzo
Con-
|
|
|
struction
Limited
|
|
1968
|
6,885.75
|
1,295
24
|
818.09
|
67.56
|
9,066.64
|
|
—
and
—
|
|
|
Interest
|
|
|
To
Jan.
|
|
|
22,
1969
|
|
|
John
DiLorenzo
|
|
1968
|
125,976.24
|
11,981.84
|
38,275.77
|
5,301.02
|
181,534.87
|
|
Nicola
Di
|
|
|
Lorenzo
Trading
|
|
|
Di
Lorenzo
|
|
|
Construction
|
|
|
Company
|
|
|
TOTALS
|
|
$321,775.80
|
$45,695.92
|
$61,227.05
|
$7,163.86
|
$435,862.63
|
Besides
the
above
payment,
the
current
deductions
made
each
month
had
to
be
remitted
on
or
before
the
15th
day
of
the
following
month.
From
July
3,
1969
to
November
10,
1969
the
Receiver
General
was
paid
pursuant
to
the
terms
of
such
agreement
the
total
sum
of
$259,464.11.
Of
this
amount,
the
department
credited
against
the
arrears
owing
by
the
said
incorporated
companies
the
sum
of
$235,294.66.
I
understand
from
the
evidence
that
such
payment
satisfied
the
arrears
owing
by
such
incorporated
companies
and
the
balance
of
$24,169.45
was
then
credited
against
the
arrears
Owing
by
the
partnership
which
still
owes
the
sum
of
$291,879.48
plus
interest
thereon.
In
November
of
1973
the
Director
of
Taxation
served
upon
Rail
Forms
Limited
and
llena
Construction
Limited,
two
corporations
allegedly
owing
money
to
the
plaintiff,
notices
pursuant
to
section
224
of
the
Income
Tax
Act
requiring
such
third
parties
to
deduct
from
the
monies
payable
by
them
to
the
plaintiff
and
pay
over
to
the
Receiver
General
of
Canada,
all
monies
for
which
they
were
or
were
about
to
become,
liable
to
the
Plaintiff.
The
plaintiff
now
brings
this
action
asking
for
a
declaration
that
no
monies
are
due
and
owing
by
the
plaintiff
to
the
defendant
with
respect
to
employee
withholding
tax
or
Canada
Pension
Plan
payments
with
respect
to
employees
which
might
otherwise
be
payable
by
Dilorenzo
Construction
Company
and
for
an
Order
directing
the
defendant
to
withdraw
such
third
party
demands.
The
plaintiff
states
that
if
such
amount
of
$235,294.66
had
been
credited
against
the
amount
owing
by
such
partnership
instead
of
against
the
amount
owing
by
such
incorporated
companies,
it
would
have
satisfied
that
debt
of
the
partnership
and
he
would
not
now
be
liable
as
a
partner
therefor.
He
says
that
the
Crown
had
no
right
to
allocate
such
monies
against
the
indebtedness
of
the
incorporated
companies.
It
is
further
argued
that
the
obligation
to
pay
such
indebtedness
as
is
described
in
such
draft
agreement
was
never
effective
because
the
document
was
never
signed
by
the
parties
thereto.
There
is
no
rule
of
law
which
requires
the
agreement
which
had
been
reached
between
the
parties
to
be
reduced
to
writing.
A
written
agreement
is
only
evidence
of
the
terms
which
the
parties
have
agreed
upon.
The
letter
to
March
3,
1969
and
the
accompanying
draft
clearly
indicates
that
the
debt
in
respect
of
the
withholding
tax
and
Canada
Pension
payments
which
had
been
retained
by
the
several
incorporated
companies
were
to
be
firstly
Satisfied
from
the
cheques
in
question.
The
terms
of
this
arrangement
were
fully
carried
out
without
any
objection
on
the
part
of
the
partnership
or
the
plaintiff
between
July
and
November,
1969.
These
facts
are
clearly
established
by
the
testimony
of
Philip
Weinstein,
a
witness
for
the
plaintiff,
who
began
working
for
the
partnership
as
well
as
the
limited
companies
on
March
1,
1969,
as
controller
of
the
whole
operation.
His
duties
caused
him
to
be
in
charge
of
all
aspects
of
the
group’s
business
except
the
actual
work
on
the
site
of
the
various
contracts
and
so
was
familiar
with
all
aspects
of
the
group’s
activities.
He
said
that
when
the
withholding
tax
or
Canada
Pension
payments
were
not
remitted
on
time,
officers
from
the
Department
of
Revenue
came
to
the
office
immediately.
It
was
usually
Donald
R
Price
who
came.
He
insisted
on
payments
being
made
regularly
but
the
records
indicate
this
was
not
lived
up
to
and
the
Department
regarded
this
group
as
a
trouble
account.
Weinstein
had
worked
for
the
Aetna
Factors
Corporation
Ltd
immediately
before
coming
to
the
DiLorenzo
group.
The
Aetna
is
a
finance
company
which
loans
money
to
industrial
concerns.
About
March
10,
1969,
such
company
had
loaned
to
the
partnership
and
the
incorporated
companies
an
amount
in
excess
of
three
million
dollars
and
took
as
security
a
floating
debenture
from
most
of
such
companies
together
with
a
general
assignment
of
their
book
debts.
Aetna
also
took
a
chattel
mortgage
on
all
assets
of
the
partnership.
The
proceeds
of
this
loan
were
deposited
in
the
Bank
of
Montreal
at
2193
Bathurst
Street,
Toronto,
in
what
was
called
the
“DiLorenzo
Special
Account”.
The
signing
officers
for
cheques
thereon
were
Weinstein
and
the
plaintiff’s
said
brother.
A
number
of
the
incorporated
companies
made
payments
into
this
account
from
time
to
time.
Weinstein
said
in
some
instances
this
account
was
used
for
payment
of
debts
of
the
incorporated
companies
as
well
as
those
of
the
partnership
and
in
repayment
of
such
loan.
It
was
on
this
account
that
all
the
cheques
enumerated
in
paragraph
4
of
the
Statement
of
Claim
were
drawn.
Exhibit
8
is
a
group
of
12
cheques
also
drawn
on
such
account,
payable
to
the
Receiver
General
of
Canada
and
bearing
dates
from
June
to
August,
1969.
Each
of
such
cheques
had
typewritten
on
the
face
thereof
a
statement
indicating
that
it
was
in
payment
of
income
tax
for
one
of
such
incorporated
companies
and
identifying
the
company.
One
dated
August
11,
1979
was
marked
“Re
N
D
Lorenzo”.
Weinstein
said
that
basically
they
considered
the
partnership
and
limited
company
as
one
group.
The
evidence
reveals
that
is
the
way
they
operated.
In
these
circumstances
it
cannot
be
said
that
the
monies
in
such
special
account
were
the
property
of
the
partnership
alone,
but
rather
that
it
belonged
to
the
whole
group.
When
the
Department’s
chief
collector
learned
that
the
group’s
assets
had
been
so
incumbered,
he
decided
it
would
be
preferable
to
leave
the
arrangements
as
to
repayment
on
what
they
termed
the
honour
system
without
reducing
the
same
to
writing
and
that
they
would
rely
on
the
terms
of
such
verbal
arrangements
whereby
all
monies
paid
were
to
be
first
credited
against
current
liabilities
of
the
incorporated
companies
to
save
them
paying
interest
thereon
and
the
balance
was
to
be
credited
entirely
against
arrears
owing
by
such
companies
until
the
same
were
completely
satisfied
thereby
and
only
thereafter
should
the
arrears
owing
by
the
partnership.
Nicola
DiLorenzo
and
Weinstein
agreed
to
these
terms
on
behalf
of
the
partnership
and
limited
companies.
This
practice
was
carried
out
throughout
the
period
in
question.
There
was
never
any
direction
from
the
partnership
nor
any
of
the
companies
as
to
which
such
companies
should
receive
the
benefit
of
any
such
payment,
as
such
cheques
were
sent
in
but
this
allocation
was
left
to
Price.
Weinstein
says
the
Department
kept
the
partnership
and
companies
advised
as
to
the
balance
owing
by
each,
regularly.
This
is
inconsistent
with
his
statement
that
they
first
knew
of
the
Department’s
allocation
in
November
of
1970.
Exhibit
7
is
a
statement
from
the
records
of
the
defendant
showing
how
each
of
such
cheques
were
credited.
It
is
important
to
note
that
all
of
the
cheques
in
question
are
credited
under
the
columns
referring
to
the
companies
and
none
to
the
partnership.
Arnold
Borts,
a
witness
for
the
plaintiff
and
employee
of
the
group
made
out
a
statement
bearing
date
October
31,
1969,
(Exhibit
5),
which
contains
exactly
the
same
information
but
made
up
in
somewhat
different
form.
This
establishes
clearly
that
the
partnership
and
the
companies
knew
at
that
time
how
these
cheques
had
been
credited.
This
witness
saw
the
statements
that
came
to
the
partnership
and
the
companies
from
the
Department
each
month
and
would
know
from
them
how
the
same
had
been
credited.
He
also
said
he
adjusted
the
books
of
the
partnership
and
limited
companies
to
correspond
with
such
allocation.
In
November
of
1969
a
receiver
was
appointed
to
take
over
the
business
of
the
group
but
no
bankruptcy
proceedings
were
taken.
The
partnership
has
not
carried
on
any
business
since
then.
The
plaintiff
alleges
he
did
not
know
of
the
arrangements
with
the
Department
in
connection
with
payment
of
the
incorporated
companies’
debt.
It
is
difficult
to
accept
such
testimony
but,
in
any
event,
such
matters
were
left
by
him
to
his
brother
and
Weinstein.
It
is
significant
that
he
did
not
call
his
brother
as
a
witness
and
he
has
not
made
available
as
evidence
the
books
and
records
of
the
partnership
and
limited
companies.
The
entries
therein
pertaining
to
withholding
tax
and
Canada
Pension
payments
and
the
disposition
thereof
would
have
been
most
helpful
if
they
supported
his
claim.
It
is
important
to
note
that
the
draft
agreement
which
the
solicitors
for
the
partnership
(Tab
2,
Exhibit
2)
sent
to
Mr
Price
for
approval
contemplated
and
space
was
therein
provided
for
signature
by
the
plaintiff.
His
long
delay
in
making
any
complaint
until
1974
when
the
attachment
proceedings
were
taken
by
the
Department
to
recover
from
him
creates
an
inference
that
there
never
was
any
merit
to
his
claims.
Any
right
to
the
relief
claimed
would
belong
to
the
partnership
rather
than
to
the
plaintiff
personally,
and
the
failure
to
have
his
brother,
the
other
partner,
as
a
party
to
the
action
or
called
as
a
witness
creates
serious
doubts
about
the
claim.
This
is
particularly
so
when
it
was
such
other
partner
who
made
the
arrangements
about
payments
of
the
arrears
with
the
Department.
For
these
reasons,
the
action
should
be
dismissed
with
costs.
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