"Buckingham v. The Queen - Stricter Due Diligence Standards for Directors", CCH Tax Topics, July 2011
Date:
August 8 2011
The April 21, 2011 Federal Court of Appeal decision in Buckingham v. The Queen should be of great interest to directors of corporations for at least a couple of reasons. First, it confirmed that the objective standard of care, diligence and skill developed by the Supreme Court of Canada in Peoples Department Store Ltd. (1992) Inc. v. Wise, in relation to paragraph 122(1)(b) of the Canada Business Corporations Act, R.S.C. 1985, C. c-44 (the "CBCA"), can extend to subsection 227.1(3) of the Income Tax Act (the "ITA") and subsection 323(3) of the Excise Tax Act (the "ETA"). Second, it restricted the ability of the appellant (director) to argue that a defence of due diligence could be sustained where his efforts were focused on curing past failures to remit source deductions and GST, without also ensuring that future failures to remit were permitted.
Republished with permission from CCH Canadian Ltd.
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