McGillivray Restaurant – Federal Court of Appeal finds that de facto control includes only significant influence over the board of directors

Silicon Graphics stated that, to have de facto control of a corporation, “a person or group of persons must have the clear right and ability to effect a significant change in the board of directors or the powers of the board of directors or to influence in a very direct way the shareholders who would otherwise have the ability to elect the board of directors.”

The Federal Court of Appeal has now rejected the proposition that subsequent decisions had expanded the concept of de facto control. Ryer JA stated:

De facto control, like de jure control, is concerned with control over the board of directors and not with control of the day-to-day operations of the corporation or its business.

Neal Armstrong. Summary of McGillivray Restaurant Ltd. v. The Queen, 2016 FCA 99 under s. 256(5.1).