GST/HST Debt and CRA's Super Priority: Secured Creditors
Beware
The Federal Court in Canada v. Toronto-Dominion Bank held that
Toronto-Dominion Bank ("TD Bank") must pay the CRA the
amount of $67,854, plus interest, on account of a customer's
outstanding GST/HST debt.
The Crown, on behalf of the CRA, sued TD Bank to recover money
that it received from one of its customers. TD had provided
the customer, Mr. Weisflock, with a mortgage and home equity line
of credit ("LOC") but was unaware that he was a GST
debtor at that time.
In 2011, the customer sold his home and used the proceeds to
clear the outstanding mortgage and LOC provided by TD Bank.
In April 2013, the CRA issued a demand letter to TD Bank. No
prior notice was ever provided to TD Bank. The CRA revised its
demand letter and issued a new demand again in 2015. TD Bank
disputed the CRA's claim.
