The payment by a receiver-manager of the net amount of the unpaid wages of the employees of the debtor company, without any deduction or remittance on account of taxes, was characterized as a default under S.227(8) (resulting in a 10% penalty) rather than S.227(9) (under which, prior to its replacement by the present ss.227(9) and (9.4) there in effect was a 110% penalty). Kelly D.J. stated (p. 6287):
"If the person paying fails to deduct, his failure has no effect on the liability of the employee for income tax it being assumed that the taxing authority will recover from the employee the full amount of the income tax; the only liability incurred by the person paying the salary or wages is a penalty calculated as a percentage of the amount he has failed to deduct. On the other hand if a deduction is actually made and the amount deducted not fully remitted ... the liability of the person paying, over and above the 10% penalty which may be assessed on account of his default in remitting, is an amount equal to the deductions he had failed to remit together with interest thereon."