beneficial owner

On September 21, 2010 the Australian Family Court made orders by consent between Mr and Ms Ellison that joined Sandini Pty Ltd (“Sandini”) as trustee for the Ellison Family Trust (of which Mr Ellison was a beneficiary) to the Family Court proceedings and required it within 7 days to do all things necessary to transfer 2.1M shares in an Australian publicly listed company (“MIN”) to Ms Ellison.

The respondent bought shares in Canadian corporations and endorsed them to a trustee who in turn issued investment certificates to the respondent, so that the respondent, along with others, held shares of "underlying companies" through an investment trust. The reference in s. 27(1)(a) of the 1948 Act to the resident Canadian corporation qualified the type of dividend, rather than the person from whom the dividend was to be received. Therefore, because the respondent was the beneficial owner of the dividends, it was entitled to the inter-corporate dividend deduction.

The taxpayer - which was a member of group of companies that included a producer of exterior trim boards for construction ("W.L.") – earned management fees and rental fees from W.L. In 2003, the taxpayer lent $3.5 million to an arm's length supplier of specially prepared boards ("Interact") secured by patents held by Interact's principal ("Cable").

In finding that the taxpayer's husband was the beneficial owner of two shares initially issued by a corporation, Rip CJ stated (at para. 23):

Mr. Strachan was the beneficial owner of the dividends paid to shareholders and received by him as owner of the two shares. He received the dividend for his own use and enjoyment. He enjoyed all the attributes of ownership of the shares and of the dividend received.

Although the taxpayer ("ATCO") continued to be the legal owner of a plant, the effect of the agreements between it and the Alberta government were that all the benefits and all the burdens that arose from the ownership thereof rested with the "Balancing Pool" of the Alberta government, so that it became the beneficial owner of the plant. Rossiter ACJ stated (at para. 69):