Bank Act (S.C. 1991, c. 46)

Marginal note:Court may set aside or require accounting

206. If a director or officer of a bank fails to comply with any of sections 202 to 205, a court, on application of the bank or any of its shareholders or members, may set aside the contract or transaction on any terms that the court thinks fit and may require the director or officer to account to the bank for any profit or gain realized on it.

Marginal note:Director’s liability

• 207. (1) Directors of a bank who vote for or consent to a resolution of the directors authorizing the issue of a share contrary to subsection 65(1), the issue of a membership share contrary to subsection 79.1(2) or the issue of subordinated indebtedness contrary to section 80 for a consideration other than money are jointly and severally, or solidarily, liable to the bank to make good any amount by which the consideration received is less than the fair equivalent of the money that the bank would have received if the share, membership share or subordinated indebtedness had been issued for money on the date of the resolution.

• Marginal note:Further liability

  (2) Directors of a bank who vote for or consent to a resolution of the directors authorizing any of the following are jointly and severally, or solidarily, liable to restore to the bank any amounts so distributed or paid and not otherwise recovered by the bank and any amounts in relation to any loss suffered by the bank:

  • (a) a redemption or purchase of shares or membership shares contrary to section 71;

  • (b) a reduction of capital contrary to section 75;

  • (c) a payment of a dividend or patronage allocation contrary to section 79;

  • (d) a payment of an indemnity contrary to section 212; or

  • (e) any transaction contrary to Part XI.

Marginal note:Contribution

• 208. (1) A director who has satisfied a judgment in relation to the director’s liability under section 207 is entitled to contribution from the other directors who voted for or consented to the unlawful act on which the judgment was founded.

• Marginal note:Recovery

  (2) A director who is liable under section 207 is entitled to apply to a court for an order compelling a shareholder, member or other person to pay or deliver to the director

  • (a) any money or property that was paid or distributed to the shareholder, member or other person contrary to section 71, 75, 79 or 212; or

  • (b) an amount equal to the value of the loss suffered by the bank as a result of any transaction contrary to Part XI.

• Marginal note:Court order

  (3) Where an application is made to a court under subsection (2), the court may, where it is satisfied that it is equitable to do so,

  • (a) order a shareholder, member or other person to pay or deliver to a director any money or property that was paid or distributed to the shareholder, member or other person contrary to section 71, 75, 79 or 212 or any amount referred to in paragraph (2)(b);

  • (b) order a bank to return or issue shares or membership shares to a person from whom the bank has purchased, redeemed or otherwise acquired shares or membership shares; or

  • (c) make any further order it thinks fit.