A corporation ("Burland") was owned by nine children of four fathers. The taxpayer ("International Iron") would have been indirectly controlled by the same children through their respective four holding companies but for the possible effect of an agreement among the four holding companies and the four fathers which provided that so long as the fathers were alive, they would be designated and elected as directors of the four holding companies, and the affirmative vote of a majority of those directors would be required for the effecting or validating of any acts of the four holding companies. In the Exchequer Court, Gibson J., in finding that International Iron and Burland were controlled by the same group of persons for purposes of s. 39(4) of the pre-1972 Act, stated (p. 5448):
"The fact that a shareholder in such a corporation may be bound under contract to vote in a particular way regarding the election of Directors (as in this case), is irrelevant to the said meaning of 'control' because the corporation has nothing to do with such a restriction."
In affirming this finding, Hall J. in the Supreme Court stated (p. 6207):
"The meaning of 'control' in s. 39(4)(b) ... means the right of control that is vested in the owners of such a number of shares in a corporation so as to give them the majority of the voting power in the corporation."