Date: 20011203
Docket: 1999-2987-IT-G
BETWEEN:
THE ESTATE OF CARL EDWARD MILLER,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasonsfor
Judgment
Bowman, A.C.J.
[1]
This appeal is from an assessment for the 1989 taxation year of
The Estate of Carl Edward Miller. By that assessment the Minister
of National Revenue denied to the appellant a capital loss which
the appellant alleges it incurred in the redemption in 1990 of
shares in Carl E. Miller Construction Limited, Ellwood Apartments
Limited, 187-193 Queen (Sarnia) Limited and which it carried back
to 1989, the year of death of Carl E. Miller. The intention was
that the loss incurred on the redemption of the shares in 1990
would be treated as having occurred in 1989 and would offset the
capital gain arising from the deemed disposition on death.
[2]
In a nutshell the problem is this: on the death of
Mr. Miller the estate became the owner of all of the shares
of the three companies. Absent a spousal rollover the death would
trigger a deemed disposition and a capital gain. It redeemed some
shares in 1990 and ordinarily this would have given rise to a
capital loss which under subsection 164(6) of the Income
Tax Act ("I.T.A.") could be electively
treated as occurring in the deceased's last taxation year to
offset the capital gain. The Minister denied the capital loss by
reason of subsection 85(4) of the I.T.A. on the basis
that the estate disposed of property to a corporation or
corporations that, immediately after the disposition, were
controlled directly or indirectly in any manner whatever by the
estate, and therefore the loss was deemed to be nil. The
appellant contends that an order of the District Court of Ontario
restricting the distribution or administration of the estate had
the effect of depriving the estate of control.
[3]
The facts are not in dispute. They are contained in an agreed
statement of facts and in an agreed book of documents.
[4]
The agreed statement of facts is set out below.
1.
Mary Eleanor Miller is the surviving spouse of the late Carl
Edward Miller (the "Deceased"). The Deceased died on
the 9th day of May, 1989.
2.
Pursuant to the Deceased's Last Will and Testament dated
February 10, 1988 (the "Will"), his daughter,
Martha Lawrance and an employee of corporations owned by the
Deceased at his death, Esther Moore, were named, therein, as
co-executors.
3.
Letters Probate of the Will of the Deceased were granted by the
Surrogate Court of the County of Middlesex on January 24,
1990.
Tab 1 - Joint Production Book
4.
The provisions of the Will of the Deceased are summarized as
follows:
a)
Mary Eleanor Miller ("Mrs. Miller") was to receive all
household goods, furnishings, chattels and effects of a personal
nature.
b)
Three legacies were to be paid.
c)
The residue of the Estate was to be invested and the net income
therefrom was to be paid to Mrs. Miller during her lifetime with
power to the executors and trustees to pay or use for her
benefit, such part of the capital as they, in their absolute
discretion, considered advisable.
d)
Upon the death of Mrs. Miller, the Estate was to be divided into
two shares; one share to be transferred to the Testator's
son, William Edward Miller, and one share to be transferred to
the Testator's daughter, Martha Lawrance. The Will further
provided that if either of the said William Edward Miller of
Martha Lawrance predeceased Mrs. Miller, that such person's
share would go to his or her children, as the case may be.
e)
Article 7 of the Will granted to the Executors and Trustees a
very broad discretion, specifically authorizing and empowering
them to carry on any business which the Deceased may have owned
or in which he may have been interested at the time of his death.
Pursuant to paragraph 7(v) of the Will, the Executors and
Trustees were expressly empowered "generally to deal with
any shares or other interests held by my estate in any company or
corporation to the same extent as I could do if alive."
Tab 2 - Joint Production Book
5.
At the time of his death, the Deceased was the registered and
beneficial owner of all of the shares, issued and outstanding, of
Carl E. Miler Construction Limited ("Construction")
which shares were, following the death of the Deceased,
transferred to the Estate. A copy of the Shareholder's
Register page pertaining to the Estate of Carl Edward Miller is
contained in the Joint Production Book at the tab referred to
below.
Tab 3 - Joint Production Book
6.
At the time of his death, the Deceased was the registered and
beneficial owner of all of the shares, issued and outstanding, of
Ellwood Apartments Limited ("Apartments") which shares
were, following the death of the Deceased, transferred to the
Estate. A copy of the Shareholder's Register page pertaining
to the Estate of Carl Edward Miller is contained in the Joint
Production Book at the tab referred to below.
Tab 4 - Joint Production Book
7.
At the time of his death, the Deceased was the registered and
beneficial owner of all of the shares, issued and outstanding, of
187 - 193 Queen (Sarnia) Limited ("Queen") which
shares were, following the death of the Deceased, transferred to
the Estate. A copy of the Shareholder's Register page
pertaining to the Estate of Carl Edward Miller is contained in
the Joint Production Book at the tab referred to below.
Tab 5 - Joint Production Book
8.
The aforementioned shares will be referred to herein as the
"Subject Shares".
9.
At all material times following the death of the Deceased, the
Directors of Construction, Apartments and Queen were Martha
Lawrance, Esther Moore and Mrs. Miller.
Tab 6 - Joint Production Book
10.
On May 12, 1989, the Directors of Construction elected Martha
Lawrance, Mrs. Miller and Esther Moore as the officers of
Construction.
Tab 7 - Joint Production Book
11.
The legacies provided for under the Will were paid, with the
consent of Mrs. Miller, which consent was given to the Estate
solicitor in or about January, 1990.
Tabs 8, 9 and 10 - Joint Production
Book
FAMILY LAW ACT MATTERS
12.
Immediately following the death of the Deceased, Mrs. Miller was
not aware of the precise nature or value of the assets in the
Estate. In consequence of incomplete legal advice received, Mrs.
Miller caused an Election to be filed by her under the provisions
subsection 6(1) of the Family Law Act (the
"FLA") to receive the entitlement described under
subsection 5(2) of the FLA.
Tab 11 - Joint Production Book
13.
Due to the quantity of assets, the complexity of the Estate and
the incomplete legal advice received, Mrs. Miller did not make an
informed decision when she filed the Election.
14.
In order to better understand her rights and her position in
these matters, Mrs. Miller retained her own independent lawyer,
Mr. Robert Morrison, and an independent accountant.
Tab 12 - Joint Production Book
15.
Mrs. Miller's solicitor advised her that he could not provide
advice to her on her position in these matters because the Estate
inventory was not available and would not be available for some
time.
16.
On the basis of advice received from Mr. Morrison and in
consequence of Mrs. Miller's inability to make an informed
decision in these matters, she instructed Mr. Morrison to apply
for an Order extending the period for filing an Election under
the FLA and suspending the administration and distribution of the
Estate until further Order of the Court.
17.
Accordingly, and pursuant to an Application made by Mrs. Miller
in the District Court of Ontario, the said District Court of
Ontario issued an Order, dated November 7, 1989, as follows:
"1.
THIS COURT ORDERS that the date by which the Applicant
Mary Eleanor Miller, must file an Election under section 6(9) of
The Family Law Act to take under the Will of her late husband,
Carl Edward Miller, or to receive the entitlement under Section
5(2) of the Act, or to remove the Election already filed, is
hereby extended to February 8, 1990, and the deemed Election
contained in section 6(10) is also hereby extended to February 8,
1990.
2.
THIS COURT ORDERS that the date by which Mary Eleanor Miller or
Martha Lawrance and Esther Moore, Executors of the Estate of Carl
Edward Miller may commence an application under subsection
7(1)(c) of the Family Law Act, 1986 to determine the entitlement
of the application pursuant to subsection 5(2) of the Act is
hereby extended to February 8, 1990.
3.
THIS COURT ORDERS that there is to be no administration or
distribution of the Estate of Carl Edward Miller prior to
February 8, 1990 except by further Order of this court or on the
written consent of this applicant.
4.
THIS COURT ORDERS that there be no award of costs with respect to
this motion except that if the application referred to in
paragraph 2 of this Order is commenced, then the costs of this
motion are hereby reserved for disposition by the Judge hearing
the application."
Tab 13 - Joint Production Book
18.
The Order described in the immediately preceding paragraph was
extended on four subsequent occasions, namely February 6, 1990,
May 5, 1990, July 26, 1990 and November 8, 1990 with the result
that the provisions of the original November 7, 1989 Order were
extended through to and including February 8, 1991.
THE ESTATE TAX PLAN
19.
In a letter dated February 6, 1990, Mr. William R. Wilkinson, of
Wilkinson, Rogers, Meyers and McNiven, accountants for
Construction, Apartments and Queen, outlined a corporate
reorganization involving each of the aforementioned corporations
(the "Tax Plan"). The implementation of the Tax Plan
has given rise to the reassessment herein.
Tab 14 - Joint Production Book
20.
Pursuant to a memo dated March 19, 1990, Mr. Morrison, the
solicitor for Mrs. Miller, "accommodated" the
implementation of the corporate reorganization.
Tab 15 - Joint Production Book
21.
Pursuant to a letter dated April 27, 1990, Mr. Morrison confirmed
to Mrs. Miller's accountants, Peat, Marwick, that he was
aware of the "election as is required under the Income Tax
Act restructuring which apparently is to evidence the redemption
of xx number of shares and a capital dividend issued in order to
trigger the loss".
Tab 16 - Joint Production Book
Subject Share Redemption
22.
By Resolution dated April 2, 1990, the Directors of Construction
resolved to redeem 970 common shares held by the Estate.
Tab 17 - Joint Production Book
23.
By Resolution dated April 20, 1990, the Directors of Construction
resolved to redeem 880 common shares held by the Estate and
elected that, for purposes of the Income Tax Act, the deemed
dividend resulting from the redemption of these shares should be
a capital dividend.
Tab 18 - Joint Production Book
24.
By an undated document entitled "Consent to Purchase for
Cancellation of Common Shares", the Estate consented to the
redemption of 880 of the shares in Construction held by it.
Tab 19 - Joint Production Book
25.
By Resolution dated April 2, 1990, the Directors of Apartments
resolved to redeem 810 common shares held by the Estate.
Tab 20 - Joint Production Book
26.
By an undated document entitled "Consent to Purchase for
Cancellation of Common Shares", the Estate consented to the
redemption of 810 of the shares in Apartments held by it.
Tab 19 - Joint Production Book
27.
By Resolution dated April 2, 1990, the Directors of Queen
resolved to redeem 3500 common shares held by the Estate.
Tab 21 - Joint Production Book
28.
By an undated document entitled "Consent to Purchase for
Cancellation of Common Shares", the Estate consented to the
redemption of 3,500 of the shares in Queen held by it.
Tab 19 - Joint Production Book
29.
On or shortly after April 2, 1990, the following shares held by
the Estate were redeemed:
1,850 Common Shares of Construction for proceeds of
$2,484,550
810 common Shares of Apartments for proceeds of $613,170
3,500 Common Shares of Queen for proceeds of $168,805.
Tax Consequences of Share Redemptions
30.
For tax purposes, the Estate treated the share redemptions
described herein as transactions giving rise to capital losses,
as follows:
Construction:
$2,247,624;
Apartments:
$566,190;and
Queen:
$158,843.
31.
There is no dispute between the parties as to the quantum of
capital losses flowing from the redemption of the subject shares
by the Corporations.
32.
Copies of, inter alia, the corporate documentation with
respect to the redemptions were provided to Mrs. Miller's
solicitor on July 11, 1990.
Tab 22 - Joint Production Book
33.
On April 30, 1990, Estate elected to carry such capital loss back
to the year of death of the Deceased, pursuant to subsection
164(6) of the Income Tax Act (Canada) (the
"Act"). The Estate Election in this regard is contained
in the Joint Production Book at Tab 22 and amended Terminal
Return of Carl Miller, signed by Esther Moore on April 27, 1990
and received by Revenue Canada on April 30, 1990, a copy of which
is contained in the Joint Production Book at Tab 23.
Tabs 23 and 24 - Joint Production
Book
34.
On May 1, 1990, Mrs. Miller's solicitor (Mr. Morrison)
attended on Mrs. Miller and was informed that she "had not
been approached to complete any "election" forms or any
matter on behalf of the estate". On June 15, 1990, Mr.
Morrison wrote to the solicitors for the Estate asking for a
report as to what tax returns, elections and copies of
resolutions had been filed with Revenue Canada.
Tabs 16, 25 and 26 - Joint Production
Book
35.
Immediately after the share redemptions referred to above (i.e.
taking place on or shortly after April 2, 1990), the Estate
continued to own all of the remaining issued and outstanding
shares of each of Construction, Apartments and Queen and was the
sole shareholder of such corporations.
36.
Construction, Apartments and Queen were subsequently amalgamated
under the name Carl E. Miller Construction Limited on May 25,
1990. Copies of the Articles of Amalgamation and of the
"Certificate of Amalgamation" are contained in the
Joint Production Book at Tabs 26 and 27. Also contained in the
Joint Production Book are copies of supporting resolutions of the
Directors of Construction, Apartments and Queen (Tabs 28, 29 and
30), the shareholders of Construction, Apartments and Queen (Tabs
31, 32 and 33) and a resolution of the shareholders of the
amalgamated corporation (Tab 34).
Tabs 27 to 35 - Joint Production
Book
37.
Ultimately, after receiving complete information and advice and
following extensive negotiations, Mrs. Miller elected, pursuant
to section 6 of the FLA to receive the entitlement under section
5 of the FLA. The completion of that aspect of the matter is
summarized in the Order of The Honorable Mister Justice Flynn
issued in the Ontario Court (General Division) dated February 6,
1991.
Tab 36 - Joint Production Book
38.
Pursuant to subsection 6(8) of the FLA, the effect of Mrs.
Miller's Election to receive the entitlement under section 5
of the FLA was that the gifts to her in the Deceased's Will
were revoked and the Will is therefore interpreted as if Mrs.
Miller had died before the Deceased.
39.
On February 4, 1991, Mrs. Miller consented to the Estate being
administered and distributed, an agreement having been reached on
February 1, 1991, between Mrs. Miller and the Executors of the
Estate. Copies of the consent and Agreement are contained in the
Joint Production Book at the tabs referred to below.
Tabs 9 and 37 - Joint Production
Book
40.
The documents referred to in the Joint Production Book are true
copies of documents the authenticity of which are admitted by
both parties.
[5]
The plan developed by the chartered accountants was relatively
straightforward. If Mrs. Miller chose to accept what was
left to her under the will, a life interest, there would be a
spousal trust and therefore a rollover under
subsection 70(6) of the I.T.A. and the deemed
disposition under subsection 70(5) of the I.T.A.
would not occur. If Mrs. Miller elected under
subsection 6(1) of the Family Law Act
("F.L.A.") the equalization payment under
subsection 5(2) of that act rather than under the will,
subsection 70(6) of the I.T.A. would not apply to
prevent the deemed disposition. Since both counsel agree that
this is the effect of an election under subsection 6(1) of
the F.L.A. to take under subsection 5(2) of the
F.L.A. it is not necessary for me to analyze
section 6 to demonstrate how that result is arrived at. I am
satisfied that this is a correct interpretation of the
interaction of the F.L.A. and section 70 of the
I.T.A.
[6]
Subsection 85(4) of the I.T.A. as it read in the
years in question is as follows.
Where a taxpayer or a partnership (hereinafter referred to as the
taxpayer) has, after May 6, 1974, disposed of any capital
property or eligible capital property of the taxpayer to a
corporation that, immediately after the disposition, was
controlled, directly or indirectly in any manner whatever, by the
taxpayer, by the spouse of the taxpayer or by a person or group
of persons by whom the taxpayer was controlled, directly or
indirectly in any manner whatever, and, but for this subsection,
subsection 24(2) and paragraphs 40(2)(e) and (g),
the taxpayer would have had a capital loss therefrom or a
deduction pursuant to paragraph 24(1)(a) in computing his
income for the taxation year in which he ceased to carry on a
business, as the case may be, the following rules apply:
(a)
notwithstanding section 24 and paragraphs 40(2)(e) and
(g), his capital loss therefrom, or his deduction pursuant
to paragraph 24(1)(a) in computing his income for the
taxation year in which he ceased to carry on the business, as the
case may be, otherwise determined shall be deemed to be nil;
and
(b)
in computing the adjusted cost base to the taxpayer of all shares
of any particular class of the capital stock of the corporation
owned by him immediately after the disposition, there shall be
added, in the case of capital property, the amount that is equal
to, and in the case of eligible capital property, 4/3 of the
amount that is equal to, that proportion of the amount, if any,
by which
(i)
the cost amount to him, immediately before the disposition, of
the property so disposed of,
exceeds
(ii)
his proceeds of disposition of the property or where the property
was an eligible capital property, his eligible capital amount,
within the meaning assigned by section 14, as a result of the
disposition of that property
that
(iii)
the fair market value, immediately after the disposition, of all
shares of that class so owned by him,
is of
(iv) the
fair market value, immediately after the disposition, of all
shares of the capital stock of the corporation so owned by
him.
[7]
Subsection 85(4) of the I.T.A. was repealed in 1998
and a somewhat similar provision was enacted as
subsection 40(3.6).
[8]
Subsection 256(5.1) of the I.T.A. reads:
For the purposes of this Act, where the expression
"controlled, directly or indirectly in any manner
whatever," is used, a corporation shall be considered to be
so controlled by another corporation, person or group of persons
(in this subsection referred to as the "controller") at
any time where, at that time, the controller has any direct or
indirect influence that, if exercised, would result in control in
fact of the corporation, except that, where the corporation and
the controller are dealing with each other at arm's length
and the influence is derived from a franchise, licence, lease,
distribution, supply or management agreement or other similar
agreement or arrangement, the main purpose of which is to govern
the relationship between the corporation and the controller
regarding the manner in which a business carried on by the
corporation is to be conducted, the corporation shall not be
considered to be controlled, directly or indirectly in any manner
whatever, by the controller by reason only of that agreement or
arrangement.
[9]
Subsection 164(6) of the I.T.A. permits the estate to
treat capital losses incurred by it in its first taxation year as
losses incurred by the deceased in his last year.
[10] The
purchase for cancellation gave rise to a deemed dividend under
subsection 84(3) of the I.T.A. It also had the effect
of triggering an entitlement to refundable tax, although this is
not really germane to this case. Apart from subsection 85(4)
of the I.T.A. it gave rise as well to a capital loss which
under subsection 164(6) of the I.T.A. could be
applied against the capital gain arising under
subsection 70(5) of the I.T.A. in the year of
death.
[11] If the
estate controlled the three corporations immediately after the
redemption the capital losses (which it agreed are otherwise
slightly less than $3,000,000) are deemed to be nil.
[12] The
estate owned all of the shares of the corporations and
accordingly would "control" the corporations in the
sense in which that word was used in Buckerfield's Ltd. et
al. v. M.N.R., 64 DTC 5301, where Jackett P.
said at page 5303:
The word "control" might conceivably refer to de
facto control by one or more shareholders whether or not they
hold a majority of shares. I am of the view, however, that, in
section 39 of the Income Tax Act, the word
"controlled" contemplates the right of control that
rests in ownership of such a number of shares as carries with it
the right to a majority of the votes in the election of the Board
of Director. See British American Tobacco Co. v. I.R.C.,
[1943] 1 A.E.R. 13, where Viscount Simon L.C., at page 15,
says:
The owners of the majority of the voting power in a company are
the persons who are in effective control of its affairs and
fortunes.
[13]
"Control" without any modification such as
"directly or indirectly in any manner whatever" and
without the expansion of that expression contained in
subsection 256(5.1) of the I.T.A. means simply de
jure control. The words "directly or indirectly in any
manner whatever" by themselves may well have been intended
to extend the meaning of control to de facto control but
evidently Parliament felt that this position needed to be
strengthened and so subsection 256(5.1) of the I.T.A.
was enacted to put the matter beyond all doubt.
[14] The
meaning of "control" of a corporation, without more,
was considered at length by Iacobucci J., speaking for a
unanimous Supreme Court of Canada in Duha Printers (Western)
Ltd. v. R., [1998] 3 C.T.C. 303,
98 DTC 6334. What emerges is the following:
1.
The Buckerfield's test as cited above is the normal
test in Canada in determining de jure control.
2.
External documents not forming part of the constating documents
do not in general warrant a departure from that rule.
3.
The unanimous shareholders' agreement in that case was not
sufficient to deprive the majority shareholder of de jure
control.
[15] The only
passage from the judgment of Iacobucci J. that I consider it
necessary to reproduce is at paragraph 85.
It may be useful at this stage to summarize the principles of
corporate and taxation law considered in this appeal, in light of
their importance. They are as follows:
(1)
Section 111(5) of the Income Tax Act contemplates de
jure, not de facto, control.
(2)
The general test for de jure control is that enunciated in
Buckerfield's, supra: whether the majority
shareholder enjoys "effective control" over the
"affairs and fortunes" of the corporation, as
manifested in "ownership of such a number of shares as
carries with it the right to a majority of the votes in the
election of the board of directors".
(3)
to determine whether such "effective control" exists,
one must consider:
(a)
the corporation's governing statue;
(b)
the share register of the corporation; and
(c)
any specific or unique limitation on either the majority
shareholder's power to control the election of the board or
the board's power to manage the business and affairs of the
company, as manifested in either:
(i)
the constating documents of the corporation; or
(ii)
any unanimous shareholder agreement.
(4)
Documents other than the share register, the constating
documents, and any unanimous shareholder agreement are not
generally to be considered for this purpose.
(5)
If there exists any such limitation as contemplated by item
3(c), the majority shareholder may nonetheless possess
de jure control, unless there remains no other way for
that shareholder to exercise "effective control" over
the affairs and fortunes of the corporation in a manner analogous
or equivalent to the Buckerfield's test.
[16] The
appellant argues that paragraph 3 of the order of
November 7, 1989 (which was extended from time to time and
covered the date on which the share redemptions occurred) takes
de jure control away from the estate. Paragraph 3
reads:
3.
THIS COURT ORDERS that there is to be no administration or
distribution of the Estate of Carl Edward Miller prior to
February 8, 1990 except by further Order of this court or on the
written consent of this applicant.
[17] It is
important that we put the order of the Ontario Court in
perspective. It was a temporary measure designed to put a hold on
the distribution of the estate or its administration for a few
months while Mrs. Miller decided whether she wanted to
proceed with the election under subsection 5(2) of the
F.L.A. or take under the will. The order neither deprived
the estate of control nor gave it to Mrs. Miller. She had a
rather limited power to veto some of the acts of administration
or distribution but she could not elect directors nor could she
influence the way in which the directors went about running the
day-to-day affairs of the three companies.
[18] If a
unanimous shareholder agreement of the type considered in
Duha does not deprive the majority shareholder of control
it is difficult to see how a court order of temporary duration
designed to maintain the status quo while Mrs. Miller
decided what election to make under the F.L.A. could
deprive the estate of legal control.
[19] I do not
accept that the words in paragraph 3 of the order of
November 7, 1989
3.
THIS COURT ORDERS that there is to be no administration or
distribution of the Estate of Carl Edward Miller prior to
February 8, 1990 except by further Order of this court or on the
written consent of this applicant.
interfere with or impinge in any way with the estate's
control of the composition of the board of directors.
[20] Counsel
for the appellant suggests that in paragraph 4 of the
summary by Iacobucci J. in Duha the word
"generally" leaves the door open to permit the court to
consider a court order of the type involved here.
[21] I do not
agree that that is the effect of Duha but even if I were
to look at the court order it merely restricts the distribution
or administration of the estate, not the legal control that the
estate has over three companies that form part of the assets.
[22] It is
clear that "administration" is a word that can be used
in different senses. In Flynn v. Capital Trust
Corporation, [1921] O.L.R. 424, Middleton J. said
at page 425:
This involves the consideration of the provisions of the Absentee
Act and the order made.
Section 7 of the Act provides that the Court may make an order
for the administration of the property of an absentee and may
appoint a committee for that purpose.
It was argued before me that "administration" means
administration in the sense in which that word is used when what
is intended is the winding-up and distribution of the estate of a
deceased person, and that for that reason the Rules relative to
administration proceedings apply. Clearly this is not so.
"Administration" is used here in a sense substantially
equivalent to "management."
[23]
"Administration" in the order of November 7, 1989
is obviously used in the former sense described by
Middleton J.
[24] Nothing
in that order restricts the power of the estate to elect the
boards of directors of the three companies.
[25] This is
sufficient to dispose of the appeal. The estate at all times had
de jure control of the corporations. However since both
counsel devoted attention to the words "directly or
indirectly in any manner whatever" and to the provisions of
subsection 256(5.1) of the I.T.A. I shall deal
briefly with those provisions. Obviously those words are intended
to broaden the concept of control to include de facto
control. A consideration of de facto control might be
necessary where someone other than the owner of a majority of the
shares had and exercised de facto control of the
corporation. In such a case it would be necessary to decide
whether the existence of de facto control in a person or
group of persons who did not own a majority of the shares ousted
the de jure control of the majority owner or whether it
could be said that the de facto controller and the de
jure controller both controlled the corporation. The latter
hypothesis is somewhat analogous to that with which
Jackett P. was concerned in Viking Food Products Ltd. v.
M.N.R., 67 DTC 5067.
[26] Here it
is not necessary that I attempt to resolve the problem of a de
facto controller who is different from a de jure
controller. There is no de facto controller that is
different from the estate.
[27] The
appeal is dismissed with costs.
Signed at Toronto, Canada, this 3rd day of December 2001.
"D.G.H. Bowman"
A.C.J.
COURT FILE
NO.:
1999-2987(IT)G
STYLE OF
CAUSE:
Between The Estate of Carl Edward Miller
and Her Majesty The Queen
PLACE OF
HEARING:
London, Ontario
DATE OF
HEARING:
November 22, 2001
REASONS FOR JUDGMENT
BY:
The Honourable D.G.H. Bowman
Associate Chief Judge
DATE OF
JUDGMENT:
December 3, 2001
APPEARANCES:
Counsel for the
Appellant:
Keith Trussler, Esq.
Counsel for the
Respondent:
Ernest Wheeler, Esq.
COUNSEL OF RECORD:
For the
Appellant:
Name:
Keith Trussler, Esq.
Firm:
Giffen & Partners
London, Ontario
For the
Respondent:
Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
1999-2987(IT)G
BETWEEN:
THE ESTATE OF CARL EDWARD MILLER,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Appeal heard on November 22, 2001, at
London, Ontario, by
The Honourable D.G.H. Bowman
Associate Chief Judge
Appearances
Counsel for the
Appellant: Keith
Trussler, Esq.
Counsel for the Respondent: Ernest
Wheeler, Esq.
JUDGMENT
It is
ordered that the appeal from the assessment made under the
Income Tax Act for the 1989 taxation year be dismissed
with costs.
Signed at Toronto, Canada, this 3rd day of December 2001.
A.C.J.
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