Pascoal v. The Queen, 2010 DTC 1010 [at at 2578], 2009 TCC 608 -- summary under Subsection 227.1(3)

The two taxpayers were the father and sister of the controlling shareholder ("Tony") of the corporations in question. In finding that they were not liable under s. 227.1, MacArthur, J. concluded that the father, who had limited abilities and business knowledge, reasonably relied on his son to apprise him of his duties and obligations as a director when they arose, and that the sister, who was only a director on paper, acted reasonably in relying on an undertaking given by Tony (which he breached) that if the corporations in question were activated, she would get out as a director.