Executive Summary: Key Legal and Evidentiary Issues

• The appellant argued that a partial lien payment satisfied a Requirement to Pay for a much larger sum.
   
• Whether a lawyer holding trust funds for a client can be "liable to make a payment" under subsection 224(1) was a central question.
   
• A due diligence defence was raised despite the absence of any such defence in the governing collection provision.
   
• Reducing the assessed liability by amounts tied to a separate Excise Tax Act debt was also disputed.
   
• Evidentiary questions turned on whether the Requirement to Pay adequately identified the amount owed.
   
• Costs remained unresolved pending further submissions from both parties.
   

Facts of the case

Folasade Dejifasanya, a real estate lawyer practicing in Toronto under the name Foladeji Law Office, acted as solicitor for two clients, Cassandra Blissett-Davis and Leslie Smith, in the sale of a jointly held property in Vaughan, Ontario. Blissett-Davis, the tax debtor, owed $144,675.79 in tax under the Income Tax Act as of March 22, 2016. Before the sale closed, Dejifasanya learned of a tax lien on the property's title and confirmed it through her own search; her client told her the lien related to roughly $12,000 in tax owing. A December 2014 instrument in the parties' joint book of documents showed the lien arose from GST indebtedness under the Excise Tax Act, and Dejifasanya's office requested a discharge letter confirming that paying $12,633.06 to the Receiver General would clear it.

On March 22, 2016, a CRA collections officer sent Dejifasanya a seven-page package by fax and later by registered mail. The cover page described two subjects: lien discharge information and a Requirement to Pay (RTP). The RTP itself named Blissett-Davis as the tax debtor and stated that no more than $144,675.79 — described as "the maximum payable" — should be paid to the Receiver General. When the sale closed on March 29, 2016, the vendors directed Dejifasanya to pay the sale proceeds to Blissett-Davis. Dejifasanya paid $12,634.78 to CRA toward the lien [note: the source document cites this lien-related figure inconsistently across paragraphs, variously as $12,633.06, $12,634.78, $12,635.78, and $12,643.78], paid off a mortgage, and issued the remaining balance of $537,152.32 to Blissett-Davis by certified cheque. No payment was made under the RTP. Dejifasanya later said she believed the lien payment had satisfied the RTP. On May 5, 2017, the Minister assessed her personally for $144,675.79 under paragraph 227(10)(a) of the Act. She objected, and the Minister confirmed the assessment on March 27, 2018. In the interim, Blissett-Davis was discharged from her tax debt through a consumer proposal under the Bankruptcy and Insolvency Act.

Policy and legislative provisions at issue

The case turned on subsections 224(1), (2), (4) and (5) of the Income Tax Act. Subsection 224(1) allows the Minister to require a third party who owes money to a tax debtor to pay that money to the Receiver General instead. Subsection 224(4) makes a person who fails to comply personally liable for the amount they were required to pay. The RTP form itself stated on its reverse side that it "applies to each and all of the amounts described on the front of the form" and required payment of "the lesser of the total of such amounts or the maximum payable." Because only one figure, $144,675.79, appeared on the front of the form as the maximum payable, the court found both figures identical, leaving no room for a lower amount. Dejifasanya's fourth argument also invoked the scope of the RTP itself, which listed the specific federal and provincial statutes it covered; the Excise Tax Act, under which the lien debt arose, was not among them.

Reasoning and analysis

Justice Russell rejected each of Dejifasanya's four submissions. First, she argued that paying $12,633.06 toward the lien satisfied the RTP. The court found that figure was never mentioned in the RTP and that the form's wording required payment of the full $144,675.79. Second, she argued the RTP could not apply because the sale proceeds were trust funds and she had no debtor-creditor relationship with Blissett-Davis. Drawing on the Federal Court of Appeal's reasoning in National Trust Co. v. R. and the British Columbia Supreme Court's decision in Discovery Trust Company v. Abbott, the court held that "liable to make a payment" under subsection 224(1) extends beyond debtor-creditor relationships to any legal obligation to pay, distinguishing the narrower reading in DeConinck v. Royal Trust Corp. of Canada. Since Dejifasanya was legally obligated to pay the sale proceeds to Blissett-Davis, she fell within the provision. Third, she claimed a due diligence defence. The court found no such defence exists for this tax-collection provision, and that in any event Dejifasanya had not acted diligently — she never contacted the CRA officer to clarify the RTP despite an invitation to do so, and a careful reading would have shown the RTP was unrelated to the lien. Fourth, she sought to reduce the assessed amount by $12,634.78 already paid and $20,970 she said CRA could have recovered but did not. The court found no basis to consider the $20,970 claim, and held that the $12,634.78 lien payment related to a GST debt under the Excise Tax Act, a statute not listed as covered by the RTP, so it could not offset the Income Tax Act liability.

Ruling and overall outcome

Justice Russell dismissed the appeal, finding Dejifasanya personally liable for the full $144,675.79 assessed under subsection 224(4) of the Income Tax Act. His Majesty the King, as respondent, was the successful party. Both sides sought costs, and Russell J. directed the parties to try to reach agreement, failing which brief written submissions on costs were to be filed by September 18, 2026 [source inconsistency: the judgment page states this deadline as September 18, 2016, while the conclusion of the reasons states September 18, 2026 — the later date is used here as the more specific and internally consistent reference, but this discrepancy should be confirmed against the original].