Royal Bank of Canada v. Sparrow Electric Corp., 97 DTC 5089, [1997] 1 SCR 411 -- summary under Subsection 227(4)

A general security interest (and a charge under s. 427 of the Bank Act) in favour of the respondent represented a fixed and specific charge on the inventory of the debtor, thereby giving priority to the respondent over the statutory trust created under s. 227(4) with respect to subsequent failures to remit source deductions. Although the security interest of the respondent was limited by the licence accorded to the debtor to deal with inventory in the ordinary course of business, this limitation applied only to the extent that there was a sale of inventory and an application of proceeds to an obligation of a third party, and did not apply here, where there is no such sale of inventory in the ordinary course of business.