Gray Aqua Group of Companies, Re is a case from New Brunswick that dealt with the remedy of substantive consolidation under the Bankruptcy and Insolvency Act (BIA). Historically, courts have shown reluctance in granting consolidation and it was seen as an extraordinary remedy.
The Supreme Court of Canada released its decision in Stuart Olson Dominion Construction Ltd. v. Structal Heavy Steel, 2015 SCC 43, on September 18, 2015 and clarified the interaction between lien claims and statutory trusts upon the filing of a lien bond. The Court found that filing a lien bond to remove a lien from property does not satisfy a contractor’s trust obligations.
Courts and lawmakers often refer to Canada Revenue Agency (“CRA”) as an involuntary creditor when businesses fail to make required tax payments to the governmental authority. The timely collection of taxes and payroll deductions also plays a fundamental role in the financing of government.