Winding-up and Restructuring Act (R.S.C., 1985, c. W-11)

Marginal note:Order for payment

• 61 (1) A court may order any contributory, purchaser or other person from whom money is due to the company to pay the money into a bank or Government savings bank, to the account of the court instead of the liquidator.

• Marginal note:Enforcement

  (2) An order under subsection (1) may be enforced in the same manner as if it had directed payment to the liquidator.

Marginal note:Rights of contributories

62 The court shall adjust the rights of the contributories among themselves.

Meetings of Creditors

Marginal note:Meetings

63 A court may, if it thinks expedient, direct meetings of the creditors, contributories, shareholders or members of a company to be summoned, held and conducted in such manner as the court directs, for the purpose of ascertaining their wishes, and may appoint a person to act as chairman of any of those meetings, and to report the result of those meetings to the court.

Marginal note:Votes according to amount of claim

• 64 (1) In the case described in section 63, regard shall, with respect to creditors, be had as to the amount of the debt due to each creditor and with respect to shareholders or members, as to the number of votes conferred on each shareholder or member by law or by the regulations of the company.

• Marginal note:Preliminary proof

  (2) The court may prescribe the mode of preliminary proof of creditors’ claims for the purpose of any meeting directed to be held under section 63.

Marginal note:Court may summon creditors to consider any proposed compromise

65 Where any compromise or arrangement is proposed between a company in the course of being wound up under this Act and the creditors of the company, or by and between any of those creditors or any class or classes of those creditors and the company or is proposed by the liquidator, the court, in addition to any other of its powers, may, on the application, in a summary way, of any creditor or of the liquidator, order that a meeting of those creditors or class or classes of creditors be summoned in such manner as the court shall direct.

Marginal note:Sanction of compromise

66 If a majority in number, representing three-fourths in value, of the creditors or class or classes of creditors referred to in section 65, present either in person or by proxy at the meeting summoned under that section, agree to any arrangement or compromise, the arrangement or compromise may be sanctioned by an order of the court, and in such case is binding on all the creditors or on the class or classes of creditors, as the case may be, and also on the liquidator and contributories of the company.

Marginal note:Chairman of meeting

67 In directing meetings of creditors, contributories, shareholders or members of a company to be held as provided in this Act, the court may either appoint a person to act as chairman of the meeting or direct that a chairman be appointed by the persons entitled to be present at the meeting, and, in the event the appointed chairman fails to attend the meeting, the persons present at the meeting may elect a qualified person as chairman who shall perform the duties prescribed by this Act.

Marginal note:Voting to be in person or by proxy

68 No creditor, contributory, shareholder or member of a company shall vote at any meeting unless present personally or represented by a person acting under a written authority, filed with the chairman or liquidator, to act as the representative at the meeting, or generally.

69 and 70 [Repealed, 1996, c. 6, s. 152]

Creditors’ Claims

Marginal note:What debts may be proved

• 71 (1) When the business of a company is being wound up under this Act, all debts and all other claims against the company in existence at the commencement of the winding-up, certain or contingent, matured or not, and liquidated or unliquidated, are admissible to proof against the company and, subject to subsection (2), the amount of any claim admissible to proof is the unpaid debt or other liability of the company outstanding or accrued at the commencement of the winding-up.

• Marginal note:Uncertain claims valued

  (2) In case of any claim subject to any contingency or for unliquidated damages or which for any other reason does not bear a certain value, the court shall determine the value of the claim and the amount for which it shall rank.

Marginal note:Claims of clerks and employees privileged

72 Clerks or other persons in, or having been in the employment of, a company, in or about its business or trade, shall be collocated in the dividend sheet by special privilege over other creditors, for any arrears of salary or wages due and unpaid to them at the time of the making of a winding-up order in respect of the company, not exceeding the arrears that have accrued to them during the three months immediately preceding the date of that order.

Marginal note:Law of set-off to apply

• 73 (1) The law of set-off, as administered by the courts, whether of law or equity, applies to all claims on the estate of a company, and to all proceedings for the recovery of debts due or accruing due to a company at the commencement of the winding-up of the company, in the same manner and to the same extent as if the business of the company was not being wound up under this Act.

• Marginal note:Trust money

  (2) For greater certainty, where the business of a trust company is being wound up under this Act, the law of set-off applies in respect of all moneys received or held by the company as deposits, without regard to whether those moneys are considered to be received or held by it in a trustee-beneficiary relationship.

Marginal note:Time for sending in claims

74 A court may, with respect to the winding-up of a company, fix a certain day or certain days on or within which creditors of the company may send in their claims, and may direct notice thereof to be given by the liquidator, and may determine the manner in which notice of the day or days so fixed shall be given by the liquidator to the creditors.

Marginal note:Creditors required to prove claims

• 75 (1) The liquidator may give notice in writing to creditors who have sent in their claims to him or of whose claims he has notice, and to creditors whose claims he considers should not be allowed without proof, requiring them to attend before the court on a day to be named in the notice and prove their claims to the satisfaction of the court.

• Marginal note:Disallowance on default

  (2) Where a creditor does not attend in pursuance of the notice given under subsection (1), his claim shall be disallowed, unless the court sees fit to grant further time for the proof thereof.

• Marginal note:Disallowance on hearing

  (3) Where a creditor attends in pursuance of the notice given under subsection (1), the court may on hearing the matter allow or disallow the claim of that creditor in whole or in part.

Marginal note:Distribution of assets

• 76 (1) After the notices required by sections 74 and 75 have been given, the respective times specified in the notices have expired and all claims of which proof has been required by due notice in writing by the liquidator in that behalf have been allowed or disallowed by the court in whole or in part, the liquidator may distribute the assets of the company or any part of those assets among the persons entitled to them and without reference to any claim against the company, or, in the case of an authorized foreign bank, against the authorized foreign bank in respect of its business in Canada, that has not then been sent to the liquidator.

• Marginal note:Claims not sent in

  (2) The liquidator is not liable to any person whose claim has not been sent in at the time of distributing the assets or part thereof under subsection (1) for the assets or part thereof so distributed.

Marginal note:Rank of claims sent in after distribution started

77 Where any claim or claims are sent in to the liquidator after any partial distribution of the assets of a company, the claim or claims, subject to proof and allowance as required by this Act, shall rank with other claims of creditors in any future distribution of assets of the company.

Secured Claims

Marginal note:Duty of creditor holding security

78 If a creditor holds security on the estate of a company, or, in the case of an authorized foreign bank, a creditor or person holds security on the assets of the authorized foreign bank, the creditor or person shall specify the nature and amount of the security in the claim, and shall, in the claim, on oath, put a specified value on the security.

Marginal note:Option of liquidator

79 The liquidator, under the authority of the court, may either consent to the retention by the creditor, or, in the case of an authorized foreign bank, by the creditor or person who holds security, of the property and effects constituting the security referred to in section 78 or on which it attaches, at the value specified on the security, property and effects, or may require from the creditor or person an assignment and delivery of the security, property and effects, at the specified value, to be paid by the liquidator out of the estate as soon as the liquidator has realized the security, together with interest on the value from the date of filing the claim until payment.

Marginal note:Ranking of secured creditor

80 In the event of the retention referred to in section 79, the difference between the value at which the security is retained and the amount of the claim of the creditor shall be the amount for which he may rank in any future distribution of assets.

Marginal note:Security by negotiable instrument

• 81 (1) If a creditor holds a claim based on negotiable instruments on which the company or, in the case of an authorized foreign bank, the authorized foreign bank in respect of its business in Canada, is only indirectly or secondarily liable and that is not mature or exigible, the creditor is considered to hold security within the meaning of sections 78, 79 and 80, and shall put a value on the liability of the person primarily liable on the security as being the security for the payment of the claim.

• Marginal note:Revaluation

  (2) After the maturity of the liability referred to in subsection (1) and its non-payment, the creditor is entitled to amend and revalue his claim.

Marginal note:Authorized foreign bank

81.1 Where a person holds security on the assets of an authorized foreign bank, other than those in respect of its business in Canada

• (a) sections 80 and 81 do not apply in relation to the person’s claim;

• (b) where there is a difference between the value at which the security is retained and the amount of the person’s claim, no claim for the difference in value is admissible to proof or may be made under this Act against the assets of the authorized foreign bank; and

• (c) the person is not barred from any recourse either in law or in equity against the authorized foreign bank in proceedings outside Canada for the difference referred to in paragraph (b).

Marginal note:Security by mortgage or charge

82 Where the security consists of a mortgage on ships or shipping or on real property, or of a registered judgment or an execution binding real property that is not by any other provision of this Act invalid for any purpose of creating a lien, claim or privilege on the real or personal property of the company, the property mortgaged or bound by the security shall only be assigned and delivered to the creditor, or, in the case of an authorized foreign bank, to the creditor or person who holds the security

• (a) subject to all previous mortgages, judgments, executions, hypothecs and liens on the security, holding rank and priority before the creditor’s or person’s claim;

• (b) on the creditor’s or person’s assuming and binding themself to pay all of those previous mortgages, judgments, executions, hypothecs and liens; and

• (c) on the creditor’s or person’s securing the estate of the company to the satisfaction of the liquidator against any claim by reason of those previous mortgages, judgments, executions, hypothecs and liens.

Marginal note:In case of subsequent claims

83 Where there are mortgages, judgments, executions, hypothecs or liens on ships or shipping or real property subsequent to those of a creditor or person referred to in section 82, the creditor or person shall only obtain the property

• (a) by consent of the subsequently secured creditors or persons;

• (b) on the subsequently secured creditors or persons filing their claims specifying their security on the property as of no value;

• (c) on the creditor or person paying the subsequently secured creditors or persons the value by them placed on the property; or

• (d) on the creditor or person securing the estate of the company to the satisfaction of the liquidator against any claim by reason of the subsequent mortgages, judgments, executions, hypothecs and liens.

Marginal note:Authority to retain

84 On a secured claim being filed, with a valuation of the security, the liquidator shall procure the authority of the court to consent to the retention of the security by the creditor or, in the case of an authorized foreign bank, by the creditor or other person who holds the security or shall require from the creditor or person an assignment and delivery of the security.

Dividend Sheet

Marginal note:Preparing dividend sheet

85 In the preparation of a dividend sheet, due regard shall be had to the rank and privilege of every creditor, but no dividend shall be allotted or paid to any creditor holding security on the estate of the company for his claim until the amount for which he may rank as a creditor on the estate, with respect to dividends therefrom, is established as herein provided.

Liens

Marginal note:No lien by execution, etc., after commencement of winding-up

• 86 (1) No lien or privilege shall be created

  • (a) on the real or personal property of the company for the amount of any judgment debt, or of the interest thereon, by the issue or delivery to the sheriff of any writ of execution or by levying on or seizing under that writ the effects or estate of the company, or

  • (b) on the real or personal property of the company, or on any debts due or accruing or becoming due to the company, by the filing or registering of any memorial or minute of judgment or by the issue or taking out of any attachment or garnishee order or other process or proceeding,

  if, before the payment over to the plaintiff of the moneys actually levied, paid or received under the writ, memorial, minute, attachment, garnishee order or other process or proceeding, the winding-up of the business of the company has commenced.

• Marginal note:Lien for costs excepted

  (2) This section does not affect any lien or privilege for costs that the plaintiff possesses under the law of the province in which the writ, attachment, garnishee order or other process or proceeding was issued or taken out.