After finding that the taxpayers had resigned in 2001, notwithstanding that written resignation forms were not signed by them, so that 2008 assessments of them under s. 227.1 were not permitted (see the summary under s. 227.1(4)), Boyle J went on to find (at para. 32) that in the case of one of the taxpayers, her failure to take any action respecting source deduction remittances was reasonable as her belief, that she had resigned, was "entirely reasonable" even if the resignations were not legally effective, stating (at para. 30):
If the knowledgeable and experienced lawyers representing the parties could so credibly argue the point armed with authorities…it is entirely reasonable to think that an average non-lawyer Canadian would reasonably think she had resigned… ."stated (at para. 25) that "the OBCA specifies that a resignation be written but not that it be signed" and noted (at para. 22) that "all of the directors, officers and principals of the company understood the wives were resigning at that time" which "means that the company clearly understood they resigned."
However, this alternative finding was not applicable to the second taxpayer as she was not aware that her oral resignation had been communicated to legal counsel to be evidenced in writing.
A further alternative submission that there also was an "economic necessity" for the company to pay its only source of financing in priority to making source deductions was rejected.