Sedona Networks Corporation v. Canada, 2007 DTC 5359, 2007 FCA 169 -- summary under Canadian-Controlled Private Corporation

An agreement under which a Canadian-resident private corporation ("Ventures") was accorded the right to exercise, in its sole discretion, the voting rights with respect to shares of the taxpayer owned by a Canadian bank subsidiary ("BMCC") as well as the right to acquire those shares in the case BMCC terminated the agreement without proper cause, and a general power of attorney executed by BMCC to allow Ventures to carry out management services on BMCC's behalf, did not give Ventures de jure control of the taxpayer. Given that such shares were controlled (indirectly) by the Bank (a public company) resulted in the taxpayer not qualifying as a Canadian-controlled private corporation. Malone J.A. also noted (in relation to some employee stock options) that the effect of s. 251(5)(b) was to deem such options to be exercised so that the shares were owned by the optionees for purposes of applying the mythical ownership test in the definition of Canadian-controlled private corporation.