Clarke v. The Queen, 2000 DTC 6230 (FCTD)

Amounts which the corporation had failed to remit were evidenced by promissory notes issued to Revenue Canada to be paid on a deferred basis. MacKay rejected a submission that a failure to pay some of the amounts under the promissory note after a receiver-manager was appointed did not give rise to a liability under s. 227.1. He noted, at p. 6239, "that the liability of the directors arises at the time the corporation failed to remit the source deduction" and that "the promissory notes did not constitute a transaction separate from the liability of the plaintiffs under the Act". For similar reasons, he also rejected a submission that the plaintiffs were not liable in respect of a failure to remit that was not discovered until the time of a post-receivership audit by Revenue Canada.

The plaintiffs were absolved of responsibility in respect of failures to remit that occurred during a "soft receivership" given that ultimate responsibility in all key financial decisions rested with an accounting firm acting to protect the interests of the bank. With respect to other periods when there was neither a soft receivership nor an actual receivership in place, it was found that the directors had failed to take sufficient affirmative measures to ensure that current remittances were paid on time and in full given their knowledge of the cash flow difficulties the corporation faced.