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Trust and Loan Companies Act (S.C. 1991, c. 45)

Act current to 2019-11-19 and last amended on 2019-06-17. Previous Versions

PART VICorporate Governance (continued)

Financial Statements and Auditors (continued)

Auditor (continued)

Marginal note:Auditor’s attendance

  •  (1) The auditor of a company is entitled to receive notice of every meeting of the audit committee and the conduct review committee of the company and, at the expense of the company, to attend and be heard at that meeting.

  • Marginal note:Attendance

    (2) If so requested by a member of the audit committee, the auditor shall attend every meeting of the audit committee held during the member’s term of office.

  • 1991, c. 45, s. 335
  • 1993, c. 34, s. 125(F)

Marginal note:Calling meeting

  •  (1) The auditor of a company or a member of the audit committee may call a meeting of the audit committee.

  • Marginal note:Right to interview

    (2) The chief internal auditor of a company or any officer or employee of the company acting in a similar capacity shall, at the request of the auditor of the company and on receipt of reasonable notice, meet with the auditor.

Marginal note:Notice of errors

  •  (1) A director or an officer of a company shall forthwith notify the audit committee and the auditor of the company of any error or misstatement of which the director or officer becomes aware in an annual statement or other financial statement on which the auditor or any former auditor has reported.

  • Marginal note:Error noted by auditor

    (2) If the auditor or a former auditor of a company is notified or becomes aware of an error or misstatement in an annual statement or other financial statement on which the auditor reported and in the auditor’s opinion the error or misstatement is material, the auditor or former auditor shall inform each director of the company accordingly.

  • Marginal note:Duty of directors

    (3) When under subsection (2) the auditor or a former auditor of a company informs the directors of an error or misstatement in an annual statement or other financial statement, the directors shall

    • (a) prepare and issue a revised annual statement or financial statement; or

    • (b) otherwise inform the shareholders and the Superintendent of the error or misstatement.

Marginal note:Qualified privilege for statements

 Any oral or written statement or report made under this Act by the auditor or a former auditor of a company has qualified privilege.

Remedial Actions

Marginal note:Derivative action

  •  (1) Subject to subsection (2), a complainant or the Superintendent may apply to a court for leave to bring an action under this Act in the name and on behalf of a company or any of its subsidiaries, or to intervene in an action under this Act to which the company or a subsidiary of the company is a party, for the purpose of prosecuting, defending or discontinuing the action on behalf of the company or the subsidiary.

  • Marginal note:Conditions precedent

    (2) No action may be brought and no intervention in an action may be made under subsection (1) by a complainant unless the court is satisfied that

    • (a) the complainant has, not less than 14 days before bringing the application or as otherwise ordered by the court, given notice to the directors of the company or the company’s subsidiary of the complainant’s intention to apply to the court under subsection (1) if the directors of the company or the company’s subsidiary do not bring, diligently prosecute or defend or discontinue the action;

    • (b) the complainant is acting in good faith; and

    • (c) it appears to be in the interests of the company or the subsidiary that the action be brought, prosecuted, defended or discontinued.

  • Marginal note:Notice to Superintendent

    (3) A complainant under subsection (1) shall give the Superintendent notice of the application and the Superintendent may appear and be heard in person or by counsel at the hearing of the application.

  • 1991, c. 45, s. 339
  • 2005, c. 54, s. 440

Marginal note:Powers of court

  •  (1) In connection with an action brought or intervened in under subsection 339(1), the court may at any time make any order it thinks fit including, without limiting the generality of the foregoing,

    • (a) an order authorizing the Superintendent, the complainant or any other person to control the conduct of the action;

    • (b) an order giving directions for the conduct of the action;

    • (c) an order directing that any amount adjudged payable by a defendant in the action be paid, in whole or in part, directly to former and present security holders of the company or of the subsidiary instead of to the company or to the subsidiary; and

    • (d) an order requiring the company or the subsidiary to pay reasonable legal fees incurred by the Superintendent or the complainant in connection with the action.

  • Marginal note:Jurisdiction

    (2) Notwithstanding subsection (1), the court may not make any order in relation to any matter that would, under this Act, require the approval of the Minister or the Superintendent.

Marginal note:Status of shareholder approval

  •  (1) An application made or an action brought or intervened in under subsection 339(1) or section 343 need not be stayed or dismissed by reason only that it is shown that an alleged breach of a right or duty owed to the company or its subsidiary has been or might be approved by the shareholders of the company or subsidiary or both, but evidence of approval by the shareholders may be taken into account by the court in making an order under section 340.

  • Marginal note:Court approval to discontinue

    (2) An application made or an action brought or intervened in under subsection 339(1) or section 343 shall not be stayed, discontinued, settled or dismissed for want of prosecution without the approval of the court given on such terms as the court thinks fit and, if the court determines that the interests of any complainant might be substantially affected by any stay, discontinuance, settlement or dismissal, the court may order any party to the application or action to give notice to the complainant.

Marginal note:No security for costs

  •  (1) A complainant is not required to give security for costs in any application made or any action brought or intervened in under subsection 339(1) or section 343.

  • Marginal note:Interim costs

    (2) In an application made or an action brought or intervened in under subsection 339(1) or section 343, the court may at any time order the company or its subsidiary to pay to the complainant interim costs, including legal fees and disbursements, but the complainant may be held accountable by the court for those interim costs on final disposition of the application or action.

  • 1991, c. 45, s. 342
  • 2005, c. 54, s. 441(F)

Marginal note:Application to rectify records

  •  (1) If the name of a person is alleged to be or to have been wrongly entered or retained in, or wrongly deleted or omitted from, the securities register or any other record of a company, the company, a security holder of the company or any aggrieved person may apply to a court for an order that the securities register or record be rectified.

  • Marginal note:Notice to Superintendent

    (2) An applicant under this section shall give the Superintendent notice of the application and the Superintendent may appear and be heard in person or by counsel at the hearing of the application.

  • Marginal note:Powers of court

    (3) In connection with an application under this section, the court may make any order it thinks fit including, without limiting the generality of the foregoing,

    • (a) an order requiring the securities register or other record of the company to be rectified;

    • (b) an order restraining a company from calling or holding a meeting of shareholders or paying a dividend before the rectification;

    • (c) an order determining the right of a party to the proceedings to have the party’s name entered or retained in, or deleted or omitted from, the securities register or records of the company, whether the issue arises between two or more security holders or alleged security holders, or between the company and any security holder or alleged security holder; and

    • (d) an order compensating a party who has incurred a loss.

Liquidation and Dissolution

Marginal note:Definition of “court”

 For the purposes of subsections 351(1) and 352(1) and (2), sections 353 to 357, subsection 358(1), sections 360 and 362 to 364, subsections 368(3) and (4) and section 373, court means a court having jurisdiction in the place where the company has its head office.

Marginal note:Application of subsection (2) and sections 346 to 373

  •  (1) Subsection (2) and sections 346 to 373 do not apply to a company that is insolvent within the meaning of the Winding-up and Restructuring Act.

  • Marginal note:Staying proceedings on insolvency

    (2) Any proceedings taken under this Part to dissolve or to liquidate and dissolve a company shall be stayed if the company is at any time found to be insolvent within the meaning of the Winding-up and Restructuring Act.

  • 1991, c. 45, s. 345
  • 1996, c. 6, s. 167
 
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