I think this question is, in fact, more complex than it might seem on first glance. At the end of the day, however, I think the reasonable answer is that a corporation cannot be the shadow director of another corporation.
My first impulse was to say that yes, a corporation could be the shadow director of another corporation. There is a natural ease to this answer, in consideration of the idea that a shadow director is the person who moves the ‘actual’ directors; the person from whom corporate control actually emanates. This fits, I think, with my own preconceived impressions of what the subsidiary/parent corporation relationship looks like. And why shouldn’t a corporation be able to be found the shadow director of another company? Wouldn’t this provide us with another way to get through the corporate divisions, insofar as it would provide the court with the ability to impose director’s liabilities on a parent company for its self-serving control of its subsidiary?
On further reflection, however, I do not believe this to be a viable path. First, consider the two-pronged definition of ‘de facto’ directors given in Chell. Chell tells us that a de facto director can either be a person duly elected but who lacks a qualification of directorship, or someone who purports to take control and act as a director. Neither of these definitions could ever fit a corporation-they would never be elected, and could not reasonably purport to assume a role as director. Even if they could, however (flashbacks to the corporate ‘managing director’ in assignment 1), a shadow director, by definition, never actually purports to be a director–that’s the whole point of being ‘in the shadows’, after all.
So how would this corporate shadow directorship actually work? Presumably, by having the director of a company be the agent of another. So let’s presume a situation similar to Chell: the agent/director has failed to remit for corp 1, and so is personally liable as a director to the CRA for those remittances. Here, then, the agent/director will try and argue that they are merely the agent, and that the corporation (call it corp 2) is the ‘true’ director–but how? The corp 2 will simply argue that their agent had two roles, and that he failed in his directorship role to corp 1 personally. Presumably then evidence will come about how the agent brought all corp 1 director decisions to a directing mind (or something) of corp 2, and then that person actually decided–but how do you take the next step, and reify those decisions of that person into decisions of corp 2 in that context? Wouldn’t corp 2 be able to say again, simply, that although the person was empowered as a directing mind, they were here just assuming an additional role, that is, as personally a shadow director of corp 1? I fear corp 2 would always have the ability to fall back on this argument, and thereby always avoid being personally found to be a shadow director-one of the great benefits of having no actual mind, I suppose. Maybe I’ve misunderstood, though, and I’d be happy to be corrected.