Lenders, like any businesses, prefer certainty. In many ways the
real property lending industry is built around trying to be as
certain as possible before a loan is advanced. Does a borrower own
their property? How much is that property worth? How much does a
borrower make in a year? Can the borrower pay the mortgage, and if
they can't, is there enough value in the property to cover the
loan?
In 2018 the Federal Court, in a decision involving the
Toronto-Dominion Bank (the "Bank"), reminded lenders
that, when it comes to amounts owing by a borrower to the Canada
Revenue Agency (the "CRA"), sometimes things really
aren't that certain.
In this case, a landscaping business (the "Borrower")
collected goods and services tax ("GST", the same
analysis applying to HST) in the amount $67,854 relating to that
business. The Borrower failed to remit this amount to the Receiver
General. In 2010, after the Borrower failed to remit collected GST,
the Bank granted the Borrower a
