Taylor,
T.C.J.:—These
are
appeals
heard
on
common
evidence
at
Regina,
Saskatchewan,
on
September
25,
1990,
against
assessments
dated
February
28,
1989,
under
subsection
227(10)
of
the
Income
Tax
Act,
R.S.C.
1952,
c.
148
(am.
S.C.
1970-71-72,
c.
63)
(the
"Act").
The
above
assessments
and
the
only
matter
at
issue
in
these
appeals
deals
with
scientific
research
development
expenses
under
Part
VIII
of
the
Act.
In
these
particular
appeals
some
aspects
of
the
circumstances
were
raised
by
counsel
for
the
appellants,
in
an
effort
to
present
the
background
in
a
more
favourable
light.
That
information
was
interesting
and
in
fact
intriguing—the
process
by
which
Revenue
Canada
claimed
back
the
amount
at
issue
($27,500
plus
interest)
first
from
the
corporation
and
failing
that
from
the
directors
thereof—the
appellants
in
this
matter.
However,
in
my
view,
the
only
real
issue
which
could
be
pursued
as
a
defence
against
the
assessments
was—that
the
appellants
ceased
to
be
directors
on
August
30,
1985,
leaving
the
assessments
statute-barred
by
virtue
of
subsection
227.1(4)
of
the
Act.
The
notice
of
appeal
recited
(using
that
of
Robert
Ruschiensky
which
is
virtually
identical
to
that
of
Leonore
Ruschiensky):
—
The
Appellant
was
a
director
and
shareholder
of
Basic
Business
Systems
Ltd.
(the
"Company")
which
was
incorporated
under
the
laws
of
Saskatchewan
on
March
1,
1981
and
which
carried
on
the
business
of
scientific
research
and
development
in
Saskatchewan
from
August
1,
1981
until
September
of
1984.
—
The
Company
entered
into
an
SRTC
Debenture
Purchase
for
$60,000
with
a
redemption
amount
of
$47,500
which
required
the
Company
to
incur
scientific
research
development
expenses
to
offset
potential
liability
under
Part
VIII
of
the
Income
Tax
Act.
—
Revenue
Canada,
Taxation
issued
a
Notice
of
Assessment
against
the
Company
for
Part
VIII
tax
in
July,
1987
on
the
basis
that
Company's
activities
did
not
constitute
qualifying
research
and
development.
—
The
Company
was
struck
off
the
Saskatchewan
Register
of
Corporations
on
August
30,
1985
and
has
not
since
been
restored,
and
as
such
the
Appellant
ceased
to
be
a
director
of
the
Company
as
of
August
30,
1985.
-
A
Certificate
for
unpaid
taxes
of
$27,300
with
interest
of
$15,819.65
was
filed
in
the
Federal
Court
of
Canada,
Trial
Division
on
September
27,
1986
in
respect
of
the
Company's
Part
VIII
tax
liability.
—
.
.
.
a
Notice
of
Assessment
was
issued
against
the
Appellant
indicating
liability
as
a
director
of
the
Company
under
Section
227.1
of
the
Company's
Part
VIII
tax
liability.
—
The
action
or
proceedings
commenced
against
the
Appellant
have
been
commenced
more
than
two
years
after
the
Appellant
ceased
to
be
a
director
of
the
Company
and
any
action
against
the
Appellant
under
Section
227.1
of
the
Income
Tax
Act
(Canada)
is
statute
barred
by
virtue
of
subsection
227.1(4).
The
reply
to
notice
of
appeal
asserted:
.
.
.
the
Respondent
denies
that
Basic
Business
Systems
Ltd.("the
Company")
carried
on
the
business
of
scientific
research
and
development.
.
.
—
.
.
.
the
Respondent
admits
that
the
Company
was
struck
off
the
Saskatchewan
Register
of
Corporations
on
August
30,
1985
and
has
not
since
been
restored,
but
expressly
denies
that,
as
such,
the
Appellant
ceased
to
be
a
director
of
the
Company
as
of
August
30,
1985.
—
The
Respondent
relies,
inter
alia,
upon
Subsections
227.1(1)
and
227.1(4)
of
the
Income
Tax
Act,
R.S.C.
1952,
c.
148,
as
amended
by
S.C.
1970-71-72,
c.
63,
s.
1,
and
the
Saskatchewan
Business
Corporations
Act,
and
subsequently,
applicable
to
Assessment
No.
2074
of
the
Appellant.
—
The
Respondent
submits
that
the
Appellant
has
not
ceased
to
be
a
director
of
the
Company,
in
fact
or
by
operation
of
the
law,
and,
therefore,
Subsection
227.1(4)
of
the
Income
Tax
Act
is
of
no
application
to
the
present
appeal.
In
my
view,
there
are
only
three
subsections
of
the
Saskatchewan
Business
Corporations
Act,
R.S.S.
1978,
c.
B-10
which
need
to
be
considered:
262.(1)
Every
corporation
carrying
on
business
in
Saskatchewan
shall
be
registered
under
this
Part
and
no
corporation
shall
carry
on
business
in
Saskatchewan
unless
it
is
so
registered.
265.
The
registration
of
a
corporation
is
terminated
when
the
name
of
the
corporation
is
struck
off
the
register
pursuant
to
section
290
but
the
registration
of
a
corporation
is
renewed
when
its
name
is
restored
to
the
register
in
accordance
with
subsection
(5)
of
section
290,.
.
.
291.
Where
the
name
of
a
corporation
is
struck
off
the
register,
the
liability
of
the
corporation
and
of
every
director
or
officer
or
member
of
the
corporation
shall
continue
and
may
be
enforced
as
if
the
name
of
the
corporation
had
not
been
struck
off
the
register.
.
.
I
am
not
persuaded
by
the
argument
of
the
appellant
that
the
procedure
of
“striking
off”
a
corporation
from
the
register
kept
by
the
Province
of
Saskatchewan
has
the
same
effect
as
dissolving,
winding-up
or
liquidating
the
corporation,
to
the
end
that
the
company
charter
is
surrendered
or
cancelled.
It
is
my
view
that
“striking
off"
the
corporation
from
the
register
only
does
that
which
is
contemplated
in
subsection
262
(above)
—restricts
the
corporation
from
carrying
on
business
in
Saskatchewan.
There
is
no
indication
that
the
existence
of
the
corporation
is
affected,
nor
is
there
any
indication
that
such
an
action
in
any
way
terminates
the
liability
of
a
director
of
the
corporation.
Further,
I
would
point
out
that
as
far
as
I
am
aware
no
action
to
dissolve
the
company
was
taken
under
section
205
of
the
same
Act,
even
after
it
was
struck
from
the
register.
The
appeals
are
dismissed.
Appeals
dismissed.
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