A Director's Resignation Must Be Signed And Delivered

Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions (including withholding to non-residents and payroll source deductions) or GST. Directors may also be jointly and severally liable for unpaid wages under employment legislation.

This makes it very important to determine when a director has resigned.

In the recent case of Canada v. Chriss ("Chriss"), the Federal Court of Appeal found that an intention to resign, as expressed by two directors to their husbands who instructed the corporation's lawyer to prepare the resignation, and as demonstrated by an unsigned resignation in the lawyer's file, did not satisfy the necessary preconditions of an effective resignation in the Ontario Business Corporations Act.