Gariepy v. The Queen

Gariepy v. The Queen

The resignations prepared by the company's counsel in September 2001 constituted valid and effective resignations such that the appellants ceased to be directors more than two years before the October 2008 assessments; accordingly the directors' liability assessments are time‑barred under s.227.1(4) ITA and the...

Source-derived case information.

Citation
2014 TCC 254
Parties
Appellant (director Assessed): Donna Elizabeth Gariepy; Appellant (director Assessed): Sally Anne Chriss; Respondent (crown): Her Majesty the Queen
Court
Tax Court of Canada
Jurisdiction
Canada
Judgment Date
19 August 2014
Procedural Posture
Directors' Liability Appeal Under the Income Tax Act (unremitted Source Deductions) / Trial Concluded — Reasons for Judgment and Disposition Issued
Outcome
Appeals allowed
Legal Topics
Directors' Liability, Source Deductions and Remittance, Due Diligence Defence, Resignation of Directors, Limitation Period
Source Language
english
Tax Law Corporate Law Directors' Liability Source Deductions and Remittance Due Diligence Defence Resignation of Directors Limitation Period

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Parties

Donna Elizabeth Gariepy

Appellant (director Assessed)

Sally Anne Chriss

Appellant (director Assessed)

Her Majesty the Queen

Respondent (crown)

Procedural Posture

Directors' Liability Appeal Under the Income Tax Act (unremitted Source Deductions) / Trial Concluded — Reasons for Judgment and Disposition Issued

Legal Issues

  1. 1 Whether the appellants validly ceased to be directors in September 2001
  2. 2 Whether, alternatively, appellants reasonably believed they had resigned and thus exercised due diligence
  3. 3 Whether a third party (Paul Caroline) had effectively ousted the directors such that they could not prevent remittances failures

Ratio Decidendi

The resignations prepared by the company's counsel in September 2001 constituted valid and effective resignations such that the appellants ceased to be directors more than two years before the October 2008 assessments; accordingly the directors' liability assessments are time‑barred under s.227.1(4) ITA and the appeals are allowed. In the alternative the court found Mrs. Chriss reasonably believed she had resigned (supporting a due diligence defence), whereas Mrs. Gariepy did not have a reasonable basis to believe she had resigned.

Court Disposition

Appeals allowed

Orders

  • Directors' liability assessments against Donna Elizabeth Gariepy and Sally Anne Chriss set aside as time‑barred under s.227.1(4) ITA
  • Parties to provide written or oral submissions on costs; submissions to be communicated within 15 days