The Supreme Court allowed the appeal in Callidus Capital Corporation v. Her Majesty the Queen, 2018 SCC 47, on November 8, 2018.
The Court adopted Pelletier J.A’s dissenting reasons and confirmed an affirmative answer to the following question:
Does the bankruptcy of a tax debtor and subsection 222(1.1) of the [Excise Tax Act] render the deemed trust under section 222 of the ETA ineffective as against a secured creditor who received, prior to the bankruptcy, proceeds from the assets of the tax debtor that were deemed to be held in trust for the Plaintiff?
The Court declined to comment on the pre-bankruptcy scope of the deemed trust (or any other liability) under s. 222 of the ETA.