Canada v. Kalef
A-11-95
McDonald J.A.
1/3/96
6 pp.
Appeal from Tax Court of Canada decision allowing taxpayer's appeal and vacating assessments made against him-Taxpayer director of Bynamics Inc. incorporated under laws of Ontario-Bynamics petitioned into bankruptcy-Taxpayer assessed by Minister of National Revenue for unremitted payroll deductions of Bynamics-Tax Court Judge holding once trustee in bankruptcy appointed and takes control of corporation's assets to exclusion of directors, director ceases to be one for purposes of Income Tax Act, s. 227.1(4)-Bankruptcy Act, s. 71(2) giving trustee power to deal with company's assets-Whether director of corporation ceases to hold position for purposes of Income Tax Act, s. 227.1(4) when trustee in bankruptcy appointed-Under s. 227.1(1) director vicariously liable for failure by company to withhold, deduct or remit source deductions-Vicarious liability imposed by s. 227.1(1) not indefinite-Taxpayer not fulfilling requirements of Ontario Business Corporations Act, s. 121(1) under which director ceases to occupy position-For purposes of Act, taxpayer remained director of Bynamics notwithstanding appointment of trustee in bankruptcy-At all pertinent times taxpayer director of Bynamics-Time limit in Income Tax Act, s. 227.1(4) not bar to reassessments-Appeal allowed-Income Tax Act, S.C. 1970-71-72, c. 63, s. 227.1(1) (as am. by S.C. 198384, c. 1, s. 100(1)), (4) (as enacted by S.C. 1980-81-82-83, c. 140, s. 124(1))-Bankruptcy and Insolvency Act, R.S.C., 1985, c. B-3, s. 71(2)-Business Corporations Act, R.S.O. 1990, c. B.16, s. 121(1).