Words and Phrases - "connected by marriage"

One-half of the shares of the 5,000 shares of the “Western Company” were owned by the “Alberta company,” and the other half were owned by the “Saskatchewan company.” Two brothers owned 60% of the shares of the Alberta company (with the balance held by the husband of their sister) and those two brothers owned 80% of the shares of the Saskatchewan company (with the balance held by the son of one of them).

S.36(4)(b)(iii) of the 1948 Act, which deemed one corporation to be related to another where "70% or more of all the issued common shares of the capital stock of each of them is owned directly or indirectly by ... persons not dealing with each other at arm's length one of whom owned directly or indirectly one or more of the shares of the capital stock of each of the corporations", did not apply to make the Western Company related to the Alberta Company and the Saskatchewan Company given that (i) neither the Alberta nor Saskatchewan owned shares of each other, and (ii) (as addressed in the concurring reasons of Cartwright J) the individual shareholders of the Alberta Company and the Saskatchewan Company did not have any ownership (direct or otherwise) in the property of the companies in which they held shares. In this regard, Cartwright J quoted with approval (at p. 511) the statement in Macaura v. Northern Assurance Company, [1925] A.C. 619 at 626 that “no shareholder has any right to any item of property owned by the company, for he has no legal or equitable interest therein.”

However, the Alberta Company and the Saskatchewan Company were related to each other under the same provision given that their shareholders were connected by blood relationship or marriage.