McGillivray Restaurant – Tax Court of Canada finds that the narrow Silicon Graphics approach to de facto control has been expanded

Silicon Graphics states that, to have de facto control of a corporation, a person or persons must have the clear ability to effect a significant change in the board or directly influence the shareholders. Boyle J confirmed that more recently (e.g., Mimetix) it has been appropriate to rely on "who controlled day‑to‑day operations, who made all the decisions, who signed all the business agreements, invoices and cheques, and who was in a position to exert economic pressure in order to have its will prevail with respect to the business and… the corporation."  This might indicate that if (as in this case) the shareholder of one corporation is the dominant executive for both his corporation and his wife’s, the two corporations will be under common de facto control even if it is not clear that the above Silicon Graphics criteria are satisfied.

Neal Armstrong.  Summary of McGillivray Restaurant Ltd. v. The Queen, 2014 TCC 357 under s. 256(5.1).