Gagné Estate – Federal Court of Appeal rejects arguments that a defective appointment of the taxpayer as a director meant that he was not liable for corporate remittance failures
The deceased (Gagné) was assessed less than two years after the registry under the Act respecting the Legal Publicity of Enterprises (Quebec) (the “ALPE”) showed him as ceasing to be the director of his majority-owned corporation. A few days before the hearing of the appeal by his estate, its notice of appeal was amended to allege inter alia that Gagné had never been a director (given that the proper corporate procedures had not been followed for his appointment, including his consenting to such appointment. and there being an absence of any resolution appointing him) – an argument never made by Gagné.
Before dismissing the estate’s appeal, LeBlanc JA noted the rebuttable presumption under s. 62 of the ALPE as to the accuracy of the registry, and that the absence of a resolution appointing Gagné should be given little weight given the absence of corporate records since before his mooted appointment as director. He further stated:
In the context of this case, the problem is that the Estate is seeking to exploit a governance defect that the principal never even raised when, on more than one occasion, he had ample opportunity to do so.
Neal Armstrong. Summary of Gagné Estate v. Canada, 2023 CAF 9 under ETA s. 323(5).