Executive Summary: Key Legal and Evidentiary Issues

Whether the three-year limitation period from the Taxation Act applies to director liability assessments or only the two-year director-specific deadline in article 24.0.2 of the Tax Administration Act. The triggering event for director liability—the sheriff's unsuccessful execution attempt rather than the initial corporate assessment—determines when limitation periods commence. References to Taxation Act provisions in article 24.0.1 were subsidiary and did not override the regime-specific two-year limitation in article 24.0.2. The exceptional nature of director liability, which derogates from the separate legal personality of corporations, required strict statutory interpretation. Application of the federal presumption of coherence between similar tax law provisions was appropriate given substantively identical regimes. Classification of the two-year deadline as prescription versus forfeiture was theoretical since the assessment fell within the timeframe regardless.

Facts and Assessment

Claude Lachance served as administrator of 10146242 Canada inc. On April 6, 2017, the ARQ assessed the corporation $626,286.84 under the Quebec Sales Tax Act for the period May 1, 2015 to July 31, 2016. The corporation failed to pay, and by December 2023, the debt exceeded $900,000 with accrued interest and collection fees. On November 17, 2020, after the sheriff reported unsuccessful seizure execution, the ARQ issued assessment CT-082370 against Lachance on September 2, 2021, claiming $822,685.45 for his joint and several liability as administrator. Lachance had ceased his administrative role on November 23, 2018.

Legal dispute and interpretation

Lachance argued the three-year limitation in article 1010 of the Taxation Act applied by reference to article 24.0.1 of the Tax Administration Act, making the assessment prescribed since it exceeded three years from the April 6, 2017 corporate assessment. The ARQ contended the two-year director-specific limitation in article 24.0.2 was the exclusive deadline, running from Lachance's cessation of office. Both lower and appellate courts agreed with the ARQ. The Quebec Court of Appeal held that articles 24.0.1 and 24.0.2 formed an integrated regime with its own temporal restriction, independent from the general impôt framework. The court found that the triggering event—the failed seizure attempt on November 17, 2020—rather than the corporate assessment date, commenced any applicable period. References to the Taxation Act were harmonization provisions, not substantive applications of the three-year rule.

Ruling and outcome

The Quebec Court of Appeal rejected Lachance's appeal with costs awarded to the ARQ. The assessment was valid because it was issued November 19, 2020, within two years of Lachance's cessation as administrator on November 23, 2018. Claude Lachance was held jointly and severally liable for the full amount of $822,685.45 in favor of the Agence du revenu du Québec. The Quebec Court of Appeal upheld the assessment against Claude Lachance in the amount of $822,685.45, which consisted of $790,983.63 in principal liability plus $31,701.82 in interest.