Financial Administration Act

Scott J. affirmed the Minister's decision not to remit amounts the taxpayer paid on penalties and on interest that had accumulated by the end of 2008 on her 1990 taxation year. The taxpayer's application was based chiefly on the CRA's silence on the outstanding amount between 1992 and 2009, where accumulated interest brought the amount owing from $1264.40 to $6990.22. The Minister denied the taxpayer's application on the basis that her situation did not fall within any of the categories in CRA's own remission guidelines, and "there are no other circumstances which would support remission." After reviewing the Assistant Commissioner's decision not to remit, Scott J. stated that "there is nothing to suggest that his decision was pre-determined or that the criteria found in the guidelines negated his discretion. He also stated (at paras. 56-57):

Seeing as the guidelines are used to assist officials in ensuring the transparency of the process as well as some consistency in decision-making, Assistant Commissioner McCauley could reasonably conclude that the collection of the tax and penalty was not unreasonable or unjust in this case.

In assessing the remission requests before him, the Assistant Commissioner must take into account the public interest. Remission remains an exceptional measure.

An agreement under which an income tax refund received by a company would be applied to the payment of the taxpayer's outstanding taxes was not contrary to sections 67 and 68 of the Financial Administration Act because the agreement would only operate when the refund was no longer a Crown debt but had been transformed into property of the company.

Northward Airlines Limited ("Northward") gave a general assignment of book debts to the Bank of Nova Scotia and filed an assignment pursuant to the Bankruptcy Act in 1980. In finding that the Bank of Nova Scotia would become the owner of any monies paid to the trustee in bankruptcy in payment of a debt owing by the Crown to Northward, MacDonald J. stated (p. 767):

"Although in the case before the court the Financial Administration Act prevents the right and remedy to recover the Crown debt from passing to the assignee of book debts, yet when the monies are paid over to the trustee in bankruptcy the rules of equity will bind the trustee to the same extent that they would have bound Northward Airlines Limited were it not in bankruptcy."

It was held that a debenture, which created a floating charge, operated "in so far as a chose in action arising after the charge crystallizes is concerned, as an equitable assignment thereof 'by way of charge only'".