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

Marginal note:Overissue

• 196. (1) Subject to this section, the provisions of this Part that validate a security or compel its issue or reissue do not apply if the validation, issue or reissue of a security would result in overissue.

• Marginal note:Identical security

  (2) The person who is entitled to a validation or issue may, if there has been an overissue and if a valid security that is similar in all respects to the security involved in the overissue is reasonably available for purchase, compel the issuer to purchase and deliver that security against the surrender of the security that the person holds.

• Marginal note:If identical security not available

  (3) If a valid security that is similar in all respects to the security involved in the overissue is not reasonably available for purchase, the person who is entitled to the validation or issue may recover from the issuer an amount equal to the price the last purchaser for value paid for the invalid security.

• Marginal note:Increase in capital

  (4) The overissued securities are valid from the date they were issued only if the issuer increases the number of its authorized securities to a number equal to or greater than the number of securities previously authorized plus the number of the securities overissued.

Marginal note:Exemptions

197. Sections 147 to 149 and 152 do not apply to a payment or purchase by an issuer under section 196.

Marginal note:Rules of action

198. The following rules apply in an action on a security:

• (a) each signature on the security certificate or in a necessary endorsement is admitted unless specifically denied in the pleadings;

• (b) a signature on the security is presumed to be genuine and authorized but, if the effectiveness of the signature is in issue, the burden of establishing that it is genuine and authorized is on the party claiming under the signature;

• (c) if a signature is admitted or established, production of a certificate entitles the holder to recover on it unless the other party establishes a defence or defect going to the validity of the security; and

• (d) if the other party establishes the defence or defect, the plaintiff has the burden of establishing that the defect is ineffective against the plaintiff or some other person under whom the claim is made.

Marginal note:Delivery of securities

• 199. (1) A person who is required to deliver securities may deliver any security of the specified issue

  • (a) in bearer form;

  • (b) in registered form in the name of the transferee; or

  • (c) endorsed to the person or in blank.

• Marginal note:Limitation

  (2) Subsection (1) is subject to any agreement to the contrary, to any applicable Act of Parliament or the legislature of a province or to any applicable regulation or stock exchange rule.