Canada Cooperatives Act (S.C. 1998, c. 1)

Act current to 2018-07-05 and last amended on 2018-05-01. Previous Versions

General

Marginal note:Incorporation by reference
  •  (1) The terms of a security include those stated on the security and those incorporated by reference to another instrument or act, Act of Parliament or the legislature of a province, regulation, rule or order to the extent that the incorporated terms do not conflict with those stated on the security.

  • Marginal note:Purchaser without notice

    (2) Subsection (1) applies to a good faith purchaser but the incorporation by reference is itself not notice of a defect to the purchaser even if the security expressly states that a person accepting it admits that notice.

  • 1998, c. 1, s. 200;
  • 2011, c. 21, s. 93(E).
Marginal note:Validity of security

 A security is valid in the hands of a good faith purchaser.

Marginal note:Defence

 Subject to section 205, the fact that a security is not genuine is a complete defence even against a good faith purchaser.

Marginal note:Defences

 All other defences of an issuer, including non-delivery and conditional delivery of a security, are ineffective against a good faith purchaser.

Marginal note:Deemed notice
  •  (1) A purchaser is deemed to have notice of any defect in the issue of a security or any defence of the issuer if the security becomes stale within the meaning of subsection (2).

  • Marginal note:Stale security

    (2) A security becomes stale if

    • (a) the purchaser takes the security more than two years after

      • (i) the date on which performance of the principal obligation evidenced by the security was due, or

      • (ii) the set date on or after which the security is to be presented or surrendered for redemption or exchange; or

    • (b) the payment of money or the delivery of securities is required in order to present or surrender the security, the money or securities are available on the day for the payment or delivery and the purchaser takes the security more than one year after that day.

Marginal note:Unauthorized signature
  •  (1) Subject to subsection (2), an unauthorized signature on a security is ineffective.

  • Marginal note:Limited effectiveness

    (2) An unauthorized signature on a security is effective in favour of a good faith purchaser if the signature was made by

    • (a) an authenticating trustee, transfer agent or other person entrusted by the issuer with the duty to sign the security, or similar securities, or to prepare them for signing; or

    • (b) an employee of the issuer or a person referred to in paragraph (a) who handles the security in the ordinary course of their duties.

Marginal note:Completion of form

 If a security contains the signatures necessary for its issue or transfer but is incomplete in another respect, any person may complete it in accordance with their authority.

Marginal note:Enforceability

 A security that was completed incorrectly is enforceable by a good faith purchaser.

Marginal note:Fraud

 A completed security that was improperly altered, even if fraudulently altered, remains enforceable but only according to its original terms.

Marginal note:Guarantees
  •  (1) A person signing a security as an authenticating trustee, transfer agent or other person entrusted by the issuer with the duty to sign the security guarantees to a good faith purchaser that

    • (a) the security is genuine;

    • (b) the person’s acts in connection with the security are within the person’s authority; and

    • (c) the person has reasonable grounds for believing that the security is in the form and within the amount the issuer is authorized to issue.

  • Marginal note:Liability

    (2) Unless agreed otherwise, a person referred to in subsection (1) does not assume any further liability for the validity of the security.

Marginal note:Acquisition of rights
  •  (1) On delivery of a security, the purchaser of the security acquires the rights in it that the transferor had or had authority to convey.

  • Marginal note:Claim free

    (2) A good faith purchaser of a security acquires it free from any adverse claim.

  • Marginal note:No better position

    (3) A purchaser who was a party to a fraud or illegality affecting a security or who, as a prior holder, had notice of an adverse claim does not have a better position by taking from a later good faith purchaser.

Marginal note:Limitation of the purchase

 A purchaser acquires rights only to the extent of the interest or right purchased.

  • 1998, c. 1, s. 211;
  • 2011, c. 21, s. 94(E).
Marginal note:Deemed notice
  •  (1) A purchaser of a security, or a broker for a seller or purchaser, is deemed to have notice of an adverse claim if

    • (a) the security has been endorsed “for collection” or “for surrender” or for some other purpose other than transfer; or

    • (b) the security is in bearer form and has a statement on it that it belongs to a person other than the transferor.

  • Marginal note:Name

    (2) The mere writing of a name on a security is not a statement for the purposes of paragraph (1)(b).

Marginal note:No duty to inquire
  •  (1) A purchaser of a security, or a broker for a seller or purchaser, has no duty to inquire into the rightfulness of the transfer and, subject to section 214, has no notice of an adverse claim.

  • Marginal note:Third party holding

    (2) Subsection (1) applies even if the purchaser or broker has notice that the security is held by a third person or is registered in the name of or endorsed by a fiduciary.

Marginal note:Deemed notice

 A purchaser or broker who knows that the transaction is for the personal benefit of the fiduciary or is otherwise in breach of the fiduciary’s duty is deemed to have notice of an adverse claim.

Marginal note:Staleness
  •  (1) The following events do not constitute notice of an adverse claim except if the security becomes stale within the meaning of subsection (2):

    • (a) an event that creates a right to performance of the principal obligation evidenced by the security; or

    • (b) an event that sets the date on or after which the security is to be presented or surrendered for redemption or exchange.

  • Marginal note:Staleness of security

    (2) A security becomes stale if

    • (a) the purchaser takes the security more than one year after

      • (i) the date on which performance of the principal obligation evidenced by the security was due, or

      • (ii) the date on or after which the security was to be presented or surrendered for redemption or exchange; or

    • (b) the payment of money or the delivery of securities is required in order to present or surrender the security, the money or securities are available on the day for the payment or delivery and the purchaser takes the security more than six months after that day.

Marginal note:Guarantee
  •  (1) A person who presents a security for registration of transfer or for payment or exchange guarantees to the issuer that the person is entitled to do so.

  • Marginal note:Limitation on guarantee

    (2) A good faith purchaser who receives a new, re-issued or re-registered security and who registers a transfer guarantees only that the purchaser has no knowledge of any unauthorized signature in a necessary endorsement.

 
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