Presumption of Knowledge of Legal Context

An employer, a restaurant company, which had failed to remit employee source deductions, sold a property and, instead of paying the unremitted source deductions, used the proceeds from the sale to pay an amount owing to an unsecured creditor, namely the TD Bank, with whom it had run up various overdrafts.

In response to a Rule 220 question posed to this effect, Webb J.A. concluded (at paras. 7 and 96) that:

An unsecured creditor can rely on the bona fide purchaser for value defence to defend against a claim by the Crown [under s. 227(4.1)] for the unremitted source deductions of an employer who paid proceeds from the sale of their property to the unsecured creditor.

In this regard, Webb J.A. indicated that the authorities supported the view that the rules of equity, including the bona fide purchaser defence, can apply to a statutory trust such as that under s. 227(4.1), stating in this regard (at para. 47) that “Parliament chose to use the language of a trust and is presumed to know the meaning of the words that it chooses and ‘the legal context in which it legislates’.” In this regard, he quoted the statement in R. v. D.L.W., 2016 SCC 22 at para. 20 that:

Most recently in R. v. Summers, 2014 SCC 26, [2014] 1 S.C.R. 575, the Court noted that "Parliament is presumed to know the legal context in which it legislates" and that it is "inconceivable" that Parliament would intend to disturb well-settled law without "explicit language" or by "relying on inferences that could possibly be drawn from the order of certain provisions in the Criminal Code": paras. 55-56.