Canada Not-for-profit Corporations Act (S.C. 2009, c. 23)

Marginal note:Overissue

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

• Marginal note:Identical debt obligation

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

• Marginal note:If identical debt obligation not available

  (3) If a valid debt obligation that is similar in all respects to the debt obligation 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 debt obligation.

• Marginal note:Increase in capital

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

Marginal note:Rules of action

55. The following rules apply in an action on a debt obligation:

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

• (b) a signature on the debt obligation 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 debt obligation certificate entitles the holder to recover on it unless the other party establishes a defence or defect going to the validity of the debt obligation; and

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

Marginal note:Delivery of debt obligations

• 56. (1) A person who is required to deliver debt obligations may deliver any debt obligation 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 of the legislature of a province, to any applicable regulation or to any applicable rule of a stock exchange or other regulatory body.