The appellant ("First Vancouver") purchased accounts receivable from a tax debtor ("Great West") that was in arrears in remitting source deductions.
Requirements to pay that were issued under s. 224(1.2) by the Minister to the person owing the accounts receivable did not attach to the accounts receivable that had been purchased by First Vancouver. The s. 227(4.1) deemed trust was similar in principle to a floating charge over all the tax debtor's assets in favour of Her Majesty. Viewed in this way, property that came into possession of a tax debtor was caught by the trust and became subject to Her Majesty's interest and, similarly, property which the tax debtor disposed of was thereby released from the deemed trust (as occurred here)