Appeared in the April 2009 issue of The Bottom Line
The Federal Court of Appeal released its decision in The
Queen v. Prevost Car Inc. on February 26, 2009. The CRA's
appeal was denied. The case turned on the meaning of the term
"beneficial owner."
Prevost Car Inc. ("Prevost") is a resident Canadian
corporation that manufactures buses and related products in Quebec
and elsewhere throughout North America. In May 1995 the
shareholders of Prevost agreed to sell their shares to Volvo Bus
Corporation ("Volvo"), a resident of Sweden, and Henlys
Group PLC ("Henlys"), a resident of the United Kingdom.
Volvo and Henlys entered into a shareholders' subscription
agreement on May 3, 1995, in which Volvo undertook to incorporate a
Netherlands holding company ("Holdco") and to transfer to
it all of the shares that Volvo acquired in Prevost. Fifty-one
percent of the shares of Holdco would be owned by Volvo and 49
percent by Henlys.
