Canadian Imperial Bank of Commerce v. Canada
T-1448-83
Simpson J.
18/5/95
19 pp.
Appeal from Minister's assessment regarding source deductions payable with respect to employees' wages of plaintiff's corporate client following company closure-Corporate client recording large financial losses -- Plaintiff bank placing representative (monitor) at company as condition to continued financial support -- Minister contending monitor's role rendering plaintiff "trustee" and thus liable for employees' wages pursuant to Act, s. 153 -- Plaintiff's objectives in appointing monitor four-fold: (1) to ensure timely financial reports; (2) to ensure trade creditors only paid current amounts due and not arrears; (3) to assist in sale of company; (4) to increase sales and introduce efficiencies -- Monitor involved in both decision making and reporting functions; monitor granted cheque signing authority on company general account -- Monitor not automatically deemed to have full control of company due to fact company compelled to accept monitor -- Although monitor becoming integral and influential part of senior management team, monitor neither absolutely nor substantially controlling company's operations-With respect to signing authority, monitor's financial role limited to payment of ordinary amounts consistent with costs of ongoing operations; monitor not controlling company's expenditures through signing authority -- Notice of motion to amend particular statute, proffered by plaintiff, not considered in construction of provision as such legislation may never be drafted and become law -- Although Tax Court noting Parliament intending s. 153 word "trustee" to be broadly construed, Tax Court declining to find fiduciary relationship between bank and client on basis facts not indicating required degree of control to justify expectation Bank would act in customers' interest (Toronto Dominion Bank v. The Queen (1994), 94 D.T.C. 1261 (T.C.C.)) -- Similarly for plaintiff bank to be deemed trustee using Toronto Dominion rationale, monitor must have exercised primary responsibility for major aspects of company's business; adverse finding of required degree of control -- Plaintiff bank not trustee within meaning of s. 153 and not liable to be assessed for unpaid source deductions -- Action allowed -- Income Tax Act, S.C. 1970-71-72, c. 63, s. 153(1), (1.3) (as enacted by S.C. 1980-81-82-83, c. 48, s. 86), (1.4) (as enacted idem).