Canada Not-for-profit Corporations Act (S.C. 2009, c. 23)

Assented to 2009-06-23

Marginal note:Warranties of guarantor of signature
  •  (1) A person who guarantees the signature of an endorser of a debt obligation warrants that, at the time of signing, the signer was an appropriate person to endorse and the signature was genuine.

  • Marginal note:Limitation of liability

    (2) A person who guarantees the signature of an endorser does not otherwise warrant the rightfulness of the transfer to which the signature relates.

  • Marginal note:Warranties of guarantor of endorsement

    (3) A person who guarantees the endorsement of a debt obligation warrants both the signature and the rightfulness, in all respects, of the transfer to which the signature relates, but an issuer may not require a guarantee of endorsement as a condition to registration of transfer.

  • Marginal note:Extent of liability

    (4) If a guarantee referred to in subsection (1) or (3) is made to any person who, relying on the guarantee, takes or deals with the debt obligation, the guarantor is liable to the person for any loss resulting from breach of warranty.

Marginal note:Presumption of delivery

 Delivery of a debt obligation to a purchaser occurs when

  • (a) the purchaser or a person designated by the purchaser acquires possession of it;

  • (b) the purchaser’s broker acquires possession of a debt obligation specially endorsed to or issued in the name of the purchaser;

  • (c) the purchaser’s broker sends the purchaser confirmation of the purchase and the broker in the broker’s records identifies a specific debt obligation as belonging to the purchaser; or

  • (d) in respect of an identified debt obligation to be delivered while still in the possession of a third person, that person acknowledges that it is held for the purchaser.

Marginal note:Presumption of ownership
  •  (1) A purchaser is the owner of a debt obligation held for the purchaser by a broker, but a purchaser is not a holder except in the cases described in paragraphs 87(b) and (c).

  • Marginal note:Ownership of part of fungible bulk

    (2) If a debt obligation is part of a fungible bulk, by nature or usage of trade, a purchaser of the debt obligation is the owner of the proportionate share in the bulk.

  • Marginal note:Notice to debt obligations broker of adverse claim

    (3) Notice of an adverse claim received by a broker or by a purchaser after the broker takes delivery as a holder for value is not effective against the broker or the purchaser, except that, as between the broker and the purchaser, the purchaser may demand delivery of an equivalent debt obligation in respect of which no notice of an adverse claim has been received.

Marginal note:Delivery of debt obligation
  •  (1) Unless agreed otherwise, if a sale of a debt obligation is made through brokers, on a stock exchange or otherwise,

    • (a) the selling customer fulfils their duty to deliver when the customer delivers the debt obligation to the selling broker or to a person designated by the selling broker or when they cause an acknowledgement to be made to the selling broker that the debt obligation is held for the selling broker; and

    • (b) the selling broker, including a correspondence broker, acting for a selling customer fulfils their duty to deliver by delivering the debt obligation or a similar debt obligation to the buying broker or to a person designated by the buying broker or by effecting clearance of the sale in accordance with the rules of the exchange on which the transaction took place.

  • Marginal note:Duty to deliver

    (2) Except as provided otherwise in this section and unless agreed otherwise, a transferor’s duty to deliver a debt obligation under a contract of purchase is not fulfilled until the transferor delivers the debt obligation in negotiable form to the purchaser or to a person designated by the purchaser, or causes an acknowledgement to be made to the purchaser that the debt obligation is held for the purchaser.

  • Marginal note:Delivery to debt obligations broker

    (3) A sale to a broker purchasing for the broker’s own account is subject to subsection (2) and not subsection (1), unless the sale is made on a stock exchange.

Marginal note:Right to reclaim possession
  •  (1) A person against whom the transfer of a debt obligation is wrongful may, against anyone except a good faith purchaser,

    • (a) reclaim possession of the debt obligation or obtain possession of a new debt obligation evidencing all or part of the same rights; or

    • (b) claim damages.

  • Marginal note:Recovery when unauthorized endorsement

    (2) If the transfer of a debt obligation is wrongful by reason of an unauthorized endorsement, the owner may reclaim possession of the debt obligation or a new debt obligation even from a good faith purchaser if the ineffectiveness of the purported endorsement is asserted against the purchaser under section 85.

Marginal note:Right to requisites for registration
  •  (1) Unless agreed otherwise, a transferor shall, on demand, supply a purchaser with proof of the transferor’s authority to transfer a debt obligation or with any other requisite that is necessary to obtain registration of the transfer of a debt obligation, but if the transfer is not for value, it is not necessary for the transferor to provide authority to transfer unless the purchaser pays the reasonable and necessary costs of the proof and transfer.

  • Marginal note:Rescission of transfer

    (2) If a transferor fails to comply with a demand under subsection (1) within a reasonable time, the purchaser may reject, rescind or resolve the transfer.

Marginal note:Seizure of debt obligation

 No seizure of a debt obligation or other interest or right evidenced by the debt obligation is effective until the person making the seizure obtains possession of the debt obligation.

Marginal note:Not liable if good faith delivery

 An agent or mandatary, or a bailee, who in good faith has received debt obligations and sold, pledged or delivered them according to the instructions of the principal or mandator is not in breach of their duties as a fiduciary or otherwise liable even though they have no right to dispose of the debt obligations.

Marginal note:Duty to register transfer
  •  (1) If a debt obligation in registered form is presented for transfer, the issuer shall register the transfer if

    • (a) the debt obligation is endorsed by an appropriate person;

    • (b) reasonable assurance is given that the endorsement is genuine and effective;

    • (c) the issuer has no duty to inquire into adverse claims or has discharged that duty;

    • (d) all applicable laws relating to the collection of taxes have been complied with;

    • (e) the transfer is rightful or is to a good faith purchaser; and

    • (f) any transfer fee referred to in section 39 has been paid.

  • Marginal note:Liability for delay

    (2) An issuer who has a duty to register a transfer of a debt obligation is liable to the person presenting it for registration for any loss resulting from an unreasonable delay in registration or from the failure or refusal to register the transfer.

 
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