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[2012] 3 F.C.R. D-4

Income Tax

Corporations

Appeal from Tax Court of Canada (T.C.C.) decision (2011 TCC 201) denying appeal of assessment pursuant to Income Tax Act, R.S.C., 1985 (5th Supp.), c. 1, s. 227.1(1) for unremitted employee source deductions of mining corporation—Execution for amount of unremitted source deductions unsatisfied because corporation dissolved for failing to file annual corporate returns, having no assets—Appellant arguing inter alia that assessment issued outside statutory time limit established in Act, s. 227.1(4) because of appellant’s resignation as director two years before assessment; precondition to liability in Act, s. 227.1(2)(b) not met; T.C.C. wrongfully refusing to admit file notes as evidence of appellant’s resignation on basis of hearsay—File notes potentially relevant to question of whether appellant resigning as director—T.C.C. erring in refusing to admit file notes as evidence in proceeding conducted under informal procedure rules without first considering whether notes sufficiently reliable, probative to justify admission, taking into account need for fair, expeditious hearing—As to legal argument relating to Act, s. 227.1(2) (which shields directors from liability under Act, s. 227.1(2) unless one of conditions in Act, ss. 227.1(2)(a),(b) or (c) met), Court in Kennedy v. Canada, [1992] 2 C.T.C. 59 (F.C.A.), affg Kennedy v. Minister of National Revenue, [1991] 2 C.T.C. 2333 (T.C.C.) correctly deciding that s. 227.1(2)(b) not applying where corporation dissolved under procedure not requiring appointment of liquidator or submission of proofs of claim—Savoy v. Canada, 2011 TCC 35 incorrectly decided on this point, not to be followed—Phrase “proof of claim” in s. 227.1(2)(b) referring to proof of claim in liquidation or dissolution proceedings—Appeal allowed.

Madison v. Canada (A-177-11, 2012 FCA 80, Sharlow J.A., judgment dated March 8, 2012, 11 pp.)

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