http://decision.tcc-cci.gc.ca/tcc-cci/decisions/en/item/73118/index.do 
Gariepy v. The Queen (August 19, 2014 – 2014 TCC 254) was an appeal concerning director’s liability for unremitted income tax withholdings:
[5] George Chriss, husband of the Appellant Sally Anne Chriss, and Derek Gariepy, husband of the Appellant Donna Gariepy, together carried on the business of 105. They had previously carried on business together in another corporation, CG Industries (“CGI”), which ended up insolvent and leaving significant unremitted withholdings to CRA. They sought insolvency related advice in respect of CGI’s demise from their corporate counsel, Gowling Lafleur Henderson LLP (“Gowlings”).
[6] It was decided by the husbands to start a very similar business afresh in 105 which was a corporation Gowlings had earlier incorporated for George Chriss but which had remained inactive until then. Aware of the two year potential liabilities attaching to the demise of CGI, the husbands chose to have their wives alone be the directors and officers of 105 when it was reorganized prior to becoming active in 1999. It is maintained by the husbands that they believed that was best given the advice as they understood it from Gowlings. Obviously, there had been a misunderstanding as this does not make sense. I do not believe that Gowlings would have recommended that the wives become directors.
[7] The wives had never been involved in CGI’s business and did not intend to be involved in the operations of their husbands’ new company. They did not want to become directors but agreed to their husbands’ requests and became directors of 105. From the inception, it was intended by the Chrisses and the Gariepys that the wives would be removed from the board after the two year period the husbands were concerned about had past.
[8] In 2001, nearing the expiry of the intended period for the wives to be on the board, the husbands decided it was indeed time to get the wives off the board of directors and have themselves appointed directors of 105. The wives were in agreement with this.
[9] To this end, Mr. Chriss, who managed the business affairs of 105 while Mr. Gariepy attended to sales, contacted Gowlings shortly thereafter to advise of the change of directors. At this point in time, Gowlings was owed a significant sum in respect of the prior business dealings involving Mr. Chriss and Mr. Gariepy and CGI. After a follow-up call from Mr. Chriss, Gowlings prepared written resignations for the Appellants in September 2001.
The main point before the court was whether the unsigned resignations were effective. It held they were:
[23] I find that the communication of the resignations was entirely clear at each step, consistent with the resigning directors’ desires and intentions, understood and accepted by the company, communicated by George Chriss for the benefit of the resigning directors (one of whom was his wife of many years who entrusted in him all business matters) and on behalf of the company, to the company’s counsel who then prepared the written documents that reflected exactly what was needed for the corporate minute book.
[24] I am satisfied that, in these circumstances, this was a valid and effective resignation by each of the two wives. This is consistent with this Court’s decisions in Perricelli v. Her Majesty the Queen, 2002 GSTC 71 (per C. Miller J.), Walsh v. Her Majesty the Queen, [2010] 1 CTC 2412 (per Sheridan J.), and Corkum v. Her Majesty the Queen, 2005 TCC 755 (per McArthur J.), each of which deals with the necessary form, content or communication of a valid director’s resignation for these purposes.
…
[26] The assessments were issued in 2008, more than two years after the 2001 Gowlings resignations by Mrs. Chriss and Mrs. Gariepy. For that reason, the appeals must be allowed as there can be no director liability assessed after that two year period by virtue of subsection 227.1(4).
The court also dealt with the alternative arguments raised by the appellants. In the case of Mrs. Chriss the court found that she acted reasonably in view of her honest belief that she had ceased to be a director:
[31] Even though Mrs. Chriss did not receive anything to sign or confirming that she had resigned, her belief she had resigned continued to be reasonable until at least after the period of non-remittance. She did not receive anything or hear anything suggesting she was still a director or that her resignation was ineffective.
[32] While Mrs. Chriss took no action at all to prevent the failures to remit, this is one of the exceptional cases where no action was a reasonable step for the periods after September 2001. She was entirely reasonable in her belief that she had resigned as director in September 2001 and ceased to even have in law the powers of a director, nor any other role to influence the company to make its remittances to CRA.
In the case of Mrs. Gariepy however the court did not accept this alternative position. There was evidence of another, later, resignation by Mrs. Gariepy which was of questionable authenticity:
[37] The result of the different and separate paths taken by the Gariepys from the Chrisses is that, if the Gowlings’ 2001 resignations were not valid and effective, it was not reasonable for Mrs. Gariepy to think she had ceased to be a director. The evidence does not support a finding that at any relevant time she asked for, was advised of, or was otherwise aware that George Chriss had been asked to or did contact Gowlings to advise it of the resignations. The evidence is simply insufficient to support such a finding. Had the Gariepys been aware, it is hard to see why they would go to another lawyer, even a friend, colleague or lender, to prepare a resignation for Donna Gariepy. That they sought a resignation just for Mrs. Gariepy and not Mr. Chriss supports my conclusion that the Gariepys did not make any inquiries of George Chriss about the status of Gowlings paper work or just gave up on Gowlings ever getting it done. Had that been the case, it is very hard to imagine a good reason why both Mrs. Chriss’ and Mrs. Gariepy’s resignation paperwork was not sought by the Gariepys.
[38] Based upon these separate and different actions by the Gariepys, I can not accept that Mrs. Gariepy also reasonably thought she had already done everything needed to resign. For that reason, not concerning herself in any way with the company’s tax remittance obligations alter September 2001 can not be considered to have been exercising the degree of care, diligence and skill to prevent the failure that a reasonably prudent person would have exercised in comparable circumstances.
The court also rejected an argument that a creditor of the corporation had acquired de facto control leaving the directors powerless to act.
The appeals were allowed and the court asked for submissions on costs but made it clear that under all the circumstances (both before and at the hearing) it did not anticipate any award of costs to the successful appellants:
[41] I will be signing judgments allowing the appeals on the basis of these reasons, that the September 2001 Gowlings resignations were valid and effective more than two years before the assessments appealed from. However, I would like to first receive submissions on costs from the parties so that costs can also be dealt with in the judgments along with contemporaneous reasons for the costs award. Let me be clear: I do not anticipate an award of costs in favour of the Appellants notwithstanding their success. I would like to receive submissions, in writing or orally as counsel prefers, on what amount of costs, if any, should be payable by each of the Appellants to the Respondent. I am very concerned about the significant amount of time spent by the Appellants putting forward evidence of other resignations that they recalled signing, which were not the same for each Appellant, and which evidence was a tangled web that, at best, was incorrect wishful thinking, but very much of which came across as fanciful, invented and untrue. I am even more concerned about the Gariepy’s “reconstructed” resignation, both as pre-trial behaviour of a party, and as testimony from them which I find largely very troubling. Counsel are asked to communicate their preferences and availability or timetable for costs submissions within 15 days hereof.