Christie,
A.CJ.T.C.:—The
question
to
be
answered
is
whether
the
appellant
is
jointly
and
severally
liable
with
Lillian
Smith
Travel
Consultants
Ltd.
("Travel
Consultants")
for
its
failure
to
remit
federal
income
tax
deducted
by
it
at
source
in
respect
of
its
employees
and
for
related
interest
and
penalties.
The
provisions
of
the
Income
Tax
Act,
R.S.C.
1952,
c.
148
(am.
S.C.
1970-71-72,
c.63)(the
"Act")
that
have
a
particular
bearing
on
this
appeal
are
parts
of
paragraph
227(10(a),
subsection
227.1(1)
and
subsection
227.1(2).
Under
paragraph
227(10)(a)
the
Minister
of
National
Revenue
("Minister")
may
assess
any
person
for
any
amount
payable
by
that
person
under
section
227.1
and,
where
he
sends
a
notice
of
assessment
to
that
person,
Divisions
I
and
J
are
applicable
with
such
modifications
as
the
circumstances
require.
These
divisions
deal,
among
other
things,
with
assessments
and
appeals
to
this
Court.
A
notice
of
assessment
with
March
1,
1990,
noted
thereon
as
the
date
of
mailing
and
a
further
amending
notice
of
assessment
noted
as
having
been
mailed
on
November
8,
1990,
were
sent
to
the
appellant.
Subsection
227.1(1)
states
that
where
a
corporation
has
failed
to
remit
an
amount
deducted
as
required
by
section
153
the
directors
of
the
corporation
at
the
time
the
corporation
was
required
to
remit
the
amount
are
jointly
and
severally
liable,
together
with
the
corporation,
to
pay
that
amount
and
any
interest
and
penalties
relating
thereto.
Subsection
227.1(2)
reads:
227.1(2)
A
director
is
not
liable
under
subsection
(1),
unless
(a)
a
certificate
for
the
amount
of
the
corporation's
liability
referred
to
in
that
subsection
has
been
registered
in
the
Federal
Court
of
Canada
under
section
223
and
execution
for
such
amount
has
been
returned
unsatisfied
in
whole
or
in
part;
(b)
the
corporation
has
commenced
liquidation
or
dissolution
proceedings
or
has
been
dissolved
and
a
claim
for
the
amount
of
the
corporation's
liability
referred
to
in
that
subsection
has
been
proved
within
six
months
after
the
earlier
of
the
date
of
commencement
of
the
proceedings
and
the
date
of
dissolution;
or
(c)
the
corporation
has
made
an
assignment
or
a
receiving
order
has
been
made
against
it
under
the
Bankruptcy
Act
and
a
claim
for
the
amount
of
the
corporation’s
liability
referred
to
in
that
subsection
has
been
proved
within
six
months
after
the
date
of
the
assignment
or
receiving
order.
By
the
time
the
hearing
of
this
appeal
commenced,
what
had
been
in
dispute
was
reduced
to
the
matter
of
the
proper
application
of
subsection
227.1(2)
to
the
facts
of
this
case,
which
are
undisputed
and
succinct.
There
is
in
evidence
a
copy
of
a
writ
of
fieri
facias
issued
out
of
the
Federal
Court-Trial
Division
dated
November
28,
1989,
addressed
to
the
Sheriff
of
the
Judicial
District
of
Edmonton,
Alberta,
commanding
him
to
levy
execution
against
the
property
of
Travel
Consultants
within
his
jurisdiction.
There
is
also
in
evidence
a
copy
of
a
certificate
of
the
same
date
made
under
subsection
223(2)
of
the
Act
that
is
registered
in
the
Federal
Court-Trial
Division
certifying
the
indebtedness
of
Travel
Consultants
under
the
Act.
On
January
11,
1990,
Deputy
sheriff
Eileen
Purschke
swore
an
affidavit
stating:
"That
to
the
best
of
my
knowledge
and
belief
there
are
no
goods
belonging
to
the
defendant
which
can
be
seized
or
realized
on
under
this
execution.
This
Execution
is
hereby
returned
Nulla
Bona."
In
August
1988
the
appellant
received
this
notice
from
the
Alberta
Consumer
and
Corporate
Affairs
Corporate
Registry
regarding
Travel
Consultants:
"Our
records
indicate
the
annual
return
for
1987
has
not
been
filed
for
the
above
corporation.
If
at
the
end
of
February
1989,
the
annual
return
has
not
been
submitted
to
the
Registrar,
in
a
form
suitable
for
filing,
the
Registrar
will
dissolve
the
corporation
pursuant
to
section
205.”
A
certificate
of
dissolution
was
issued
by
the
Registrar
of
Corporations
under
the
Business
Corporations
Act
of
Alberta.
It
states:
"I
hereby
certify
that
the
above-mentioned
corporation
was
dissolved
under
the
Business
Corporations
Act
pursuant
to
section
205."
The
date
of
dissolution
shown
in
the
Certificate
is
March
1,
1989.
Section
205
of
the
Business
Corporations
Act
provides:
205.(1)
Subject
to
subsections
(2)
and
(3),
if
a
corporation
(a)
has
not
commenced
business
within
3
years
after
the
date
shown
in
its
certificate
of
incorporation,
(b)
has
not
carried
on
its
business
for
3
consecutive
years,
or
(c)
is
in
default
for
a
period
of
one
year
in
sending
to
the
Registrar
any
notice
or
document
required
by
this
Act,
the
Registrar
may
dissolve
the
corporation
by
issuing
a
certificate
of
dissolution
under
this
section
or
he
may
apply
to
the
Court
for
an
order
dissolving
the
corporation,
in
which
case
section
210
applies.
(2)
The
Registrar
shall
not
dissolve
a
corporation
under
this
section
until
he
has
(a)
given
120
days
notice
of
his
decision
to
dissolve
the
corporation
to
the
corporation
and
to
each
director
of
the
corporation,
and
(b)
published
notice
of
his
decision
to
dissolve
the
corporation
in
the
Registrar's
periodical.
(3)
Unless
cause
to
the
contrary
has
been
shown
or
an
order
has
been
made
by
the
Court
under
section
239,
the
Registrar
may,
after
expiry
of
the
period
referred
to
in
subsection
(2),
issue
a
certificate
of
dissolution
in
prescribed
form.
(4)
The
corporation
ceases
to
exist
on
the
date
shown
in
the
certificate
of
dissolution.
Although
the
assessments
were
made
and
the
proceedings
instituted
in
the
Federal
Court-Trial
Division
after
the
company
was
dissolved
and
hence
ceased
to
exist,
this
is
expressly
authorized
by
paragraph
219(2)(b)
of
the
Business
Corporations
Act.
It
and
paragraph
219(2)(c)
provide:
219.(2)
Notwithstanding
the
dissolution
of
a
body
corporate
under
this
Act,
(b)
a
civil,
criminal
or
administrative
action
or
proceeding
may
be
brought
against
the
body
corporate
within
2
years
after
its
dissolution
as
if
the
body
corporate
had
not
been
dissolved,
and
(c)
any
property
that
would
have
been
available
to
satisfy
any
judgment
or
order
if
the
body
corporate
had
not
been
dissolved
remains
available
for
that
purpose.
As
I
perceive
it
the
object
of
subsection
227.1(2)
is
to
require
as
a
condition
precedent
to
making
a
director
liable
under
subsection
227.1(1)
the
taking
of
appropriate
steps
by
the
Minister
to
recover
the
debt
incurred
by
a
corporation
by
reason
of
its
having
failed
to
deduct
or
withhold
tax
at
source,
or
having
failed
to
remit
such
deductions.
It
is
the
appellant's
contention
that
fulfilling
the
requirements
of
paragraph
227.1(2)(a)
is
not
compliance
with
the
condition
precedent
in
all
cases.
Whether
there
must
be
observance
of
paragraph
227.1(2)(a)
or
(b)
or
(c)
in
order
to
do
so
will
depend
on
the
facts
of
each
case.
If
a
corporation
has
commenced
liquidation
or
dissolution
proceedings
or
has
been
dissolved,
the
route
designated
under
paragraph
227.1(2)(b)
must
be
followed.
If
a
corporation
has
made
an
assignment
or
a
receiving
order
has
been
made
against
it
under
the
Bankruptcy
Act,
paragraph
227.1(2)(c)
governs.
In
other
circumstances,
paragraph
227.1(2)(a)
is
applicable.
I
think
that
the
foregoing
is
the
proper
approach.
Travel
Consultants
having
been
dissolved,
it
is
said
that
the
appellant
is
entitled
to
succeed
because
the
Minister
complied
with
paragraph
227.1(2)(a)
and
not
paragraph
227.1(2)(b)
as
required.
This
argument
is
sustainable
only
if
in
the
case
at
hand
it
was
possible
for
the
Minister
to
comply
with
paragraph
227.1(2)(b).
It
requires
that
where
a
corporation
has
been
dissolved
without
it
having
commenced
liquidation
or
dissolution
proceedings,
which
is
what
occurred
regarding
Travel
Consultants,
a
claim
for
the
amount
of
the
corporation's
liability
referred
to
in
subsection
227.1(2)
shall
be
proved
within
six
months
after
the
date
of
dissolution.
In
the
event,
however,
that
a
corporation
is
dissolved
by
the
Registrar
under
section
205
there
is
no
provision
for
the
appointment
of
a
liquidator
to
whom
proof
of
the
corporation's
liability
can
be
made
and,
in
fact,
no
liquidator
was
appointed
with
relation
to
the
dissolution
of
Travel
Consultants.
The
matter
is
different
if
under
section
205
the
Registrar
makes
application
to
the
Court
of
Queen's
Bench
of
Alberta
for
an
order
dissolving
a
corporation
because
of
its
default
in
filing
annual
returns.
In
such
case,
section
210
of
the
Business
Corporations
Act
applies.
It
deals
with
the
power
of
the
Court
respecting
the
dissolution
of
a
corporation,
which
includes
authority
to
make
an
order
appointing
a
liquidator.
Paragraph
214(1),
subparagraph
214(b)(iii)
and
paragraph
214(c)
provide:
214.
A
liquidator
shall
(a)
forthwith
after
his
appointment
give
notice
of
his
appointment
to
the
Registrar
and
to
each
claimant
and
creditor
known
to
the
liquidator,
(b)
forthwith
publish
notice
in
the
Registrar's
periodical
and
once
a
week
for
2
consecutive
weeks
in
a
newspaper
published
or
distributed
in
the
place
where
the
corporation
has
its
registered
office
and
take
reasonable
steps
to
give
notice
in
each
province
in
Canada
where
the
corporation
carries
on
business,
stating
the
fact
of
his
appointment
and
requiring
any
person
(iii)
having
a
claim
against
the
corporation,
whether
liquidated,
unliquidated,
future
or
contingent,
to
present
particulars
of
the
claim
in
writing
to
the
liquidator
not
later
than
2
months
after
the
first
publication
of
the
notice,
(c)
take
into
his
custody
and
control
the
property
of
the
corporation,
Paragraph
227.1(2)(b)
being
inapplicable
to
this
appeal
and
the
Minister
having
observed
the
requirements
of
paragraph
227.1(2)(a)
as
permitted
by
paragraph
219(2)(b)
of
the
Business
Corporations
Act,
which
was
the
only
effectual
course
of
action
open
to
him
under
subsection
227.1(2),
this
appeal
cannot
succeed.
The
appeal
is
dismissed.
Appeal
dismissed.
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