In connection with a loan to the taxpayer by the CIBC, which was the depositary for two RRSPs that he opened up with the CIBC, it was agreed that if he should fail to meet the repayment term for loans the bank made to him he would, at the bank's request, collapse the RRSPs in order to repay the loans, or if the RRSPs could not be collapsed, the funds in the RRSPs would be applied against the loans at maturity.
In finding that after the bankruptcy of the taxpayer, the depositary had priority over other creditors of the bankrupt estate, Doherty J.A. found that the breach of s. 146(2)(c.3) only led to the tax consequences described in ss.146(12) and (13), and that s. 146(2) did not prohibit the pledging of an RRSP as security or affect the enforceability of such security.