Words and Phrases - "controlled indirectly"

The taxpayer was a non-share corporation that initially had been established to commercially exploit technology developed by the Hospital for Sick Children (the "Hospital"). O'Connor TCJ. found (at p. 233) that "the persons who control the non-share corporation are the members who in turn appoint the directors." Since, in this case, a majority of the members were not appointed by, associated with or connected with the Hospital (which was a tax-exempt person), the Hospital did not have de jure control of the taxpayer, which was the test contemplated by the phrase "controlled directly or indirectly, in any manner whatever" before the enactment of s. 256(5.1). Any control by the Hospital would have to be classified as de facto control, which would not be sufficient for these purposes.