In Cliff v Canada, 2022 FCA 16, aff’g an unreported decision of Rossiter, CJ, on other grounds, the appellant argued that she was not liable for the unremitted HST of a corporation as one of its directors because she had resigned more than two years before the CRA assessed her for it. She claimed that she had intended to resign from the moment that she was appointed. According to the Court
[4] At some point in time after this conversation, Mr. Cliff [the appellant’s husband] telephoned Mr. Welsh [the corporation’s accountant] and asked that he remove the appellant as a director of the corporation. Mr. Welsh’s secretary at the time then prepared a
“Form 1 – Initial Return/Notice of Change”. The document stated that the appellant’s directorship started on September 4, 2003 and ceased on December 12, 2003. A copy was placed in the corporation’s minute book. Mr. Welsh recalled that his office submitted Form 1 to the Ontario Ministry of Consumer and Commercial Relations. Apart from Mr. Welsh’s recollection that Form 1 was sent to the Ministry in 2003, there is no other evidence as to when Form 1 was sent to the Ministry nor do the records of the Ministry reflect the change. In their testimony before the Tax Court, neither Mr. Welsh nor Mr. Cliff could explain the discrepancy between the date of the appellant’s appointment on Form 1 and the OBCA public registry which reflects the date of the resolution in the minute book. To conclude this review of the evidentiary background, Mr. Cliff, the appellant and Mr. Welsh each testified that no written resignation was received by the corporation.
The Court held that, contrary to Rossiter CJ’s characterization of Canada v. Chriss, 2016 FCA 236, the case did not create a rule requiring every director’s resignation to be signed personally:
[11] The ratio of Chriss is that where the decision to resign is to be communicated by means of a letter, signed by the director, it must be signed to be effective. Chriss does not require that all resignations must have a personal, physical signature to be effective. A director may resign via email or text, for example. The facts of Chriss may be analogized to an email containing a resignation, but resting in the draft folder, never sent. Whatever factual circumstances arise, there can be no ambiguity regarding whether a written resignation has been received by the corporation, and there must be certainty as to the effective date. [Emphasis added.]
The Court also held that “the act of resignation itself must be expressed in writing” (¶12). A Form 1 filed in the minute book of the corporation did not represent such an act reduced to writing.
