The trial judge found that the taxpayer was a director of a business corporation when its remittance failures arose in 2001 and 2002, despite her having submitted a written resignation in 1999. The trial judge's findings had two bases. The first was that the sole director who replaced the taxpayer had no business expertise, and would automatically sign any document at the request of the corporation's principal shareholder. The second was that there was evidence that the corporation's records had been amended in 2002 to retroactively remove the taxpayer as director as of 1999.
The Court overturned the trial judge's findings. The business expertise of the taxpayer's replacement director had no bearing on the validity of the taxpayer's resignation. At best, it proved that the principal shareholder was a de jure director of the corporation. There was also no reason to conclude that the amendment of the corporate records was anything but an attempt to accurately reflect what had in fact happened - namely, that the taxpayer had ceased to be a director in 1999.