Fw: Supreme Court Ruling on Directors (fwd)

Date: Tue, 4 Jul 2000 06:27:57 -0300 (ADT)
From: Paul A Falvo <pfalvo@chebucto.ns.ca>
To: Sustainable Maritimes <sust-mar@chebucto.ns.ca>
Precedence: bulk
Return-Path: <sust-mar-mml-owner@chebucto.ns.ca>

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From: Elizabeth May

Not a surprise,
This is why SCC carries directors liability insurance, to portect our board
members from personal loss.
Elizabeth 

>----- Original Message -----
>From: Clean Annapolis River Project <carp@fox.nstn.ca>
>
>Just in case you were not aware of a Supreme Court of Canada ruling last
>week on the responsibility of Volunteer directors serving on boards.
>
>In Cape Breton, a volunteer organization was formed to undertake the
>construction of a community project. It ran into financial problems and
>the paid manager used payroll deductions held in trust as working
>capital. The organization went bankrupt owing Revenue Canada about
>$50,000 in with held payroll deductions (EI, income tax, CPP, etc.) They
>sought to recover from the volunteer directors. The defense was that
>volunteer directors should not be expected to exercise the same duty of
>care as paid directors of large corporations. The Federal  Court of
>Canada said no, that is, the directors were individually and
>collectively responsible. The directors  appealed to the Federal Court
>of Appeal and lost again with the same ruling. They appealed to the
>Supreme Court of Canada. Last week, the SofC said they would not hear
>the case, meaning that the ruling stands and the directors are
>responsible for the debt owing Revenue Canada. (For those of you in the
>US, the Supreme Court of Canada can and often does refuse to hear a
>case.)
>
>This is something that anyone involved in groups, such as the ACAP sites
>should be aware. It might be useful to hold some kind of seminar on this
>or to but together some kind of guide for volunteer directors. What is
>the duty of care required?
>
>Cheers,
>
>Steve H.
>
>PS: I may have some of the details incorrect, but the essance is there.



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