An Act to amend certain Acts in relation to financial institutions (S.C. 2005, c. 54)
Full Document:
Assented to 2005-11-25
406. Sections 209 to 211 of the Act are replaced by the following:
Marginal note:General notice
209. (1) For the purposes of subsection 207(1), a general notice to the directors declaring that a director or officer is to be regarded as interested for any of the following reasons in a contract or transaction entered into with a party is a sufficient declaration of interest in relation to any contract or transaction with that party:
(a) the director or officer is a director or officer of a party referred to in paragraph 207(1)(b) or (c) or a person acting in a similar capacity;
(b) the director or officer has a material interest in the party; or
(c) there has been a material change in the nature of the director’s or officer’s interest in the party.
Marginal note:Access to disclosures
(2) The shareholders of the company may examine the portions of any minutes of meetings of directors or committees of directors that contain disclosures under subsection 207(1), or the portions of any other documents that contain those disclosures, during the usual business hours of the company.
Marginal note:Avoidance standards
210. (1) A contract or transaction for which disclosure is required under subsection 207(1) is not invalid and a director or officer is not accountable to the company or its shareholders for any profit realized from it by reason only of the director’s or officer’s interest in the contract or transaction or the fact that the director was present or was counted to determine whether a quorum existed at the meeting of directors, or of a committee of directors, that considered it if
(a) the director or officer disclosed their interest in accordance with section 207 and subsection 209(1);
(b) the directors approved the contract or transaction; and
(c) the contract or transaction was reasonable and fair to the company at the time that it was approved.
Marginal note:Confirmation by shareholders
(2) Even if the conditions set out in subsection (1) are not met, a director or officer acting honestly and in good faith is not accountable to the company or its shareholders for any profit realized from a contract or transaction for which disclosure was required and the contract or transaction is not invalid by reason only of the director’s or officer’s interest in it if
(a) the contract or transaction is approved or confirmed by special resolution at a meeting of shareholders;
(b) disclosure of the interest was made to the shareholders in a manner sufficient to indicate its nature before the contract or transaction was approved or confirmed; and
(c) the contract or transaction was reasonable and fair to the company at the time that it was approved or confirmed.
Marginal note:Court may set aside or require accounting
211. If a director or officer of a company fails to comply with any of sections 207 to 210, a court, on application of the company or any of its shareholders, 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 company for any profit or gain realized on it.
407. Section 212 of the English version of the Act is replaced by the following:
Marginal note:Director liability
212. (1) Directors of a company who vote for or consent to a resolution of the directors authorizing the issue of a share contrary to subsection 68(1) or the issue of subordinated indebtedness contrary to section 83 for a consideration other than money are jointly and severally, or solidarily, liable to the company to make good any amount by which the consideration received is less than the fair equivalent of the money that the company would have received if the share or subordinated indebtedness had been issued for money on the date of the resolution.
Marginal note:Further liability
(2) Directors of a company 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 company any amounts so distributed or paid and not otherwise recovered by the company and any amounts in relation to any loss suffered by the company:
(a) a redemption or purchase of shares contrary to section 74;
(b) a reduction of capital contrary to section 78;
(c) a payment of a dividend contrary to section 82;
(d) a payment of an indemnity contrary to section 217; or
(e) any transaction contrary to Part XI.
408. Subsection 215(1) of the English version of the Act is replaced by the following:
Marginal note:Directors liable for wages
215. (1) Subject to subsections (2) and (3), the directors of a company are jointly and severally, or solidarily, liable to each employee of the company for all debts not exceeding six months wages payable to the employee for services performed for the company while they are directors.
Marginal note:2001, c. 9, ss. 503 and 504(F)
409. Sections 216 and 217 of the Act are replaced by the following:
Marginal note:Defence — due diligence
216. (1) A director, officer or employee of a company is not liable under section 212 or 215 or subsection 494(1) and has fulfilled their duty under subsection 162(2) if they exercised the care, diligence and skill that a reasonably prudent person would have exercised in comparable circumstances, including reliance in good faith on
(a) financial statements of the company that were represented to them by an officer of the company or in a written report of the auditor of the company fairly to reflect the financial condition of the company; or
(b) a report of a person whose profession lends credibility to a statement made by them.
Marginal note:Defence — good faith
(2) A director or officer of a company has fulfilled their duty under subsection 162(1) if they relied in good faith on
(a) financial statements of the company that were represented to them by an officer of the company or in a written report of the auditor of the company fairly to reflect the financial condition of the company; or
(b) a report of a person whose profession lends credibility to a statement made by them.
Marginal note:Indemnification
217. (1) A company may indemnify a director or officer of the company, a former director or officer of the company or another person who acts or acted, at the company’s request, as a director or officer of or in a similar capacity for another entity against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by them in respect of any civil, criminal, administrative, investigative or other proceeding in which they are involved because of that association with the company or other entity.
Marginal note:Advances
(2) A company may advance amounts to the director, officer or other person for the costs, charges and expenses of a proceeding referred to in subsection (1). They shall repay the amounts if they do not fulfil the conditions set out in subsection (3).
Marginal note:No indemnification
(3) A company may not indemnify a person under subsection (1) unless
(a) the person acted honestly and in good faith with a view to the best interests of, as the case may be, the company or the other entity for which they acted at the company’s request as a director or officer or in a similar capacity; and
(b) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, the person had reasonable grounds for believing that their conduct was lawful.
Marginal note:Indemnification — derivative actions
(4) A company may with the approval of a court indemnify a person referred to in subsection (1) or advance amounts to them under subsection (2) — in respect of an action by or on behalf of the company or other entity to procure a judgment in its favour to which the person is made a party because of the association referred to in subsection (1) with the company or other entity — against all costs, charges and expenses reasonably incurred by them in connection with that action if they fulfil the conditions set out in subsection (3).
Marginal note:Right to indemnity
(5) Despite subsection (1), a person referred to in that subsection is entitled to be indemnified by the company in respect of all costs, charges and expenses reasonably incurred by them in connection with the defence of any civil, criminal, administrative, investigative or other proceeding to which the person is subject because of the association referred to in subsection (1) with the company or other entity described in that subsection if the person
(a) was not judged by the court or other competent authority to have committed any fault or omitted to do anything that they ought to have done; and
(b) fulfils the conditions set out in subsection (3).
Marginal note:Heirs and personal representatives
(6) A company may, to the extent referred to in subsections (1) to (5) in respect of the person, indemnify the heirs or personal representatives of any person whom the company may indemnify under those subsections.
410. Paragraph 218(b) of the Act is replaced by the following:
(b) in the capacity of a director or officer of another entity or while acting in a similar capacity for another entity, if they act or acted in that capacity at the company’s request, except if the liability relates to a failure to act honestly and in good faith with a view to the best interests of the entity.
411. Paragraph 222(1)(j) of the Act is replaced by the following:
(j) change the province in which the head office of the company is situated.
412. Paragraph 229(2)(a) of the Act is replaced by the following:
(a) the name of the amalgamated company and the province in which its head office is to be situated;
413. (1) Subsection 231(2) of the Act is replaced by the following:
Marginal note:Right to vote
(2) Each share of an applicant carries the right to vote in respect of an amalgamation agreement whether or not it otherwise carries the right to vote.
(2) Subsection 231(3) of the English version of the Act is replaced by the following:
Marginal note:Separate vote for class or series
(3) The holders of shares of a class or series of shares of each applicant are entitled to vote separately as a class or series in respect of an amalgamation agreement if the agreement contains a provision that, if it were contained in a proposed amendment to the by-laws or incorporating instrument of the applicant, would entitle those holders to vote separately as a class or series.
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