While 2018 saw a slight decrease in nationwide CCAA filings (with 19 total cases commenced, compared to 23 in 2017), there were a number of important decisions rendered throughout the country. The highlights are summarized below:

Supreme Court of Canada clarifies Crown priority for GST claims

On January 16, 2019, Gymboree Group, Inc. and 10 affiliated debtors (collectively, "Debtors" or "Gymboree") filed chapter 11 in the United States Bankruptcy Court for the Eastern District of Virginia (Richmond Division). On January 17, 2019, Gymboree, Inc. commenced a parallel proceeding in Canada under subsection 50.4(a) of the Bankruptcy and Insolvency Act (Canada).  

The Ontario Superior Court of Justice recently reviewed the indicia of a sham trust in McGoey (Re).

Gerald McGoey, an undischarged bankrupt, and his wife, Kathryn McGoey, claimed to be holding two properties in trust for their children. The Trustee in Bankruptcy brought a motion to have the properties declared assets of the Estate of Gerald McGoey, subject to realization for the benefit of his creditors.

In the recent decision of Alexander Pleshakov v Sky Stream Corporation and Others (Pleshakov), the BVI Court of Appeal considered the scope of its jurisdiction to interfere with findings of fact made at first instance. This is the second time this year that the BVI Court of Appeal has addressed this issue.

The Supreme Court of Canada (the SCC) has overturned the decision rendered by a majority of the Federal Court of Appeal (the FCA) in Callidus Capital Corporation v Her Majesty the Queen.

The case originated out of a motion filed in the Federal Court (the FC) by Callidus Capital Corporation (Callidus) to determine the following question of law:

There were six substantive civil decisions released by the Court of Appeal this week. There were many criminal decisions released.

In Wall v. Shaw, the Court determined that there is no limitation period to objecting to accounts in an application to pass accounts in an estates matter. A notice of objection is not a “proceeding” within the meaning of the Limitations Act, 2002.

On November 8, 2018, in a decision delivered unanimously from the bench, the Supreme Court of Canada confirmed that the Crown’s superpriority over unremitted Goods and Services Tax/Harmonized Sales Tax (GST/HST) is ineffective against a secured creditor who received, prior to a tax debtor’s bankruptcy, proceeds from that taxpayer’s assets.1

Where there is a bankruptcy, there is no personal liability of a secured creditor to the Crown for funds received prior to the bankruptcy from a realization of assets that were subject to the deemed trust under the Excise Tax Act (Canada) (“ETA”).

Factual Background

Recent decisions of the Court of Queen's Bench of Alberta have put into question the priority of municipal property taxes in insolvency proceedings. Two such decisions are the subject of pending appeals. A third recent decision of the Court of Queen's Bench of Alberta has confirmed the scope of a special lien for municipal property taxes. This article is the first in a series addressing these issues.

Virginia Hills: Linear Tax Claims

En cas de faillite, le créancier garanti n’est pas responsable envers le fisc pour les sommes perçues avant la faillite provenant de la réalisation de biens faisant partie d’une fiducie présumée créée aux termes de la Loi sur la taxe d’accise.

Rappel des faits et contexte