A Bahamian company ("Helvetia") distributed all the shares of its Canadian subsidiary ("Quamco") equally to three trusts each of which owned one-third of its shares. The Minister assessed on the basis that the distribution of Quamco was a non-arm's length transaction, so that s. 84.1 applied to a subsequent disposition of the Quamco shares to a non-arm's length Canadian corporation for promissory notes. At trial, the Crown took the position that because the mother of the beneficiaries of the trusts, who was also the wife of the settlor, had de jure control of Helvetia by virtue of her right under the trust deed to appoint and remove trustees of each trust (who were unrelated individuals), she (and, by extension, the settlor himself) had de jure control of Helvetia. In rejecting this submission, Sarchuk TCJ. stated (at p. 1081):
There is no basis upon which this Court could conclude that trustees would neglect their fiduciary obligation to exercise voting rights in accordance with their independent judgment and would follow the wishes of another person solely because of the risk of being removed and replaced by another trustee.