PART 17Liquidation and Dissolution (continued)
Marginal note:Costs of liquidation
322 (1) A liquidator must pay the costs of liquidation out of the property of the cooperative and must pay or make adequate provision for all claims against it.
Marginal note:Final accounts
(2) No later than one year after appointment, and after paying or making adequate provision for all claims against the cooperative, the liquidator must apply to the court for
(a) approval of the final accounts of the liquidator and, subject to the articles and Parts 20 and 21, an order permitting a distribution in money or in kind of the remaining property of the cooperative to the members and shareholders, if any, according to their respective rights; or
(b) an extension of time, setting out the reasons for the extension.
(3) If a liquidator fails to make the application required by subsection (2), a member or shareholder may apply to the court for an order for the liquidator to show cause why a final accounting and distribution should not be made.
(4) A liquidator must give notice of their intention to make an application under subsection (2) to the Director, to each inspector appointed under section 316, to each member or shareholder and to any person who provided a security, a fidelity bond or fidelity insurance for the liquidation, and must publish the notice in a newspaper published or distributed in the place where the cooperative has its registered office, in any manner set out in the by-laws or as otherwise directed by the court.
Marginal note:Final order
(5) If the court approves the final accounts rendered by a liquidator, the court must make an order
(a) directing the Director to issue a certificate of dissolution;
(b) directing the custody or disposal of the documents of the cooperative; and
(c) discharging the liquidator, subject to the remaining duty required by subsection (6).
Marginal note:Delivery of order
(6) The liquidator must send a certified copy of the order described in subsection (5) to the Director without delay.
Marginal note:Certificate of dissolution
(7) On receipt of the order described in subsection (5), the Director must issue a certificate of dissolution.
Marginal note:Effect of certificate
(8) The cooperative ceases to exist on the date shown in the certificate of dissolution.
- 1998, c. 1, s. 322
- 2011, c. 21, s. 110(E)
Marginal note:Right to distribution in money
323 A member or shareholder may apply to the court for an order requiring the distribution of the property of the cooperative to be in money if, in the course of the liquidation of the cooperative, the members and shareholders resolve or the liquidator proposes to
(a) exchange all or substantially all the property of the cooperative for securities of another body corporate that are to be distributed to the members and shareholders, if any; or
(b) distribute all or part of the property of the cooperative to the members and shareholders, if any, in kind.
Marginal note:Powers of court
324 On an application under section 323, the court, subject to the articles and Parts 20 and 21, may order
(a) that all the property of the cooperative be converted into and distributed in money; or
(b) that the claims of a member or shareholder applying under this section be satisfied by a distribution in money, in which case subsections 302(19) and (20) apply.
Marginal note:Custody of documents
325 A person who has been granted custody of the documents of a dissolved cooperative remains liable to produce those documents until the end of the prescribed period or of any other shorter period fixed by an order made under subsection 322(5).
- 1998, c. 1, s. 325
- 2018, c. 8, s. 83
Marginal note:Heirs and representatives
326 (1) In this section, “member” and “shareholder” include their heirs and personal representatives.
Marginal note:Continuation of actions
(2) Despite the dissolution of a cooperative under this Act,
(a) a civil, criminal, administrative, investigative or other action or proceeding commenced by or against the cooperative before its dissolution may be continued as if it had not been dissolved;
(b) a civil, criminal, administrative, investigative or other action or proceeding may be brought against the cooperative within two years after its dissolution as if it had not been dissolved; and
(c) any property that would have been available to satisfy a judgment or order if the cooperative had not been dissolved remains available for those purposes.
(3) Service of a document on a cooperative after its dissolution may be effected by serving the document on a person named in the last notice sent under section 81 or 91.
(4) Despite the dissolution of a cooperative under this Act, a member or shareholder to whom any of its property has been distributed is liable to any person claiming under subsection (2) to the extent of the amount distributed to that member or shareholder. An action to enforce the liability may be brought no later than two years after the date of the dissolution of the cooperative.
Marginal note:Representative action
(5) A court may order an action referred to in subsection (4) to be brought against the persons who were members or shareholders as a class, subject to any conditions that the court thinks fit, and, if the plaintiff establishes a claim, the court may refer the proceedings to a referee or other officer of the court who may
(a) add as a party to the proceedings each member or shareholder who was found by the plaintiff;
(b) determine, subject to subsection (4), the amount that each of those members and shareholders must contribute towards satisfaction of the plaintiff’s claim; and
(c) direct payment of the amounts so determined.
- 1998, c. 1, s. 326
- 2001, c. 14, s. 215
- 2011, c. 21, s. 111(F)
Marginal note:Unknown claimants
327 (1) On the dissolution of a cooperative under this Act, the portion of the property to be distributed to a creditor, member or shareholder who cannot be found must be converted into money and paid to the Receiver General.
Marginal note:Deemed satisfaction
(2) A payment under subsection (1) is deemed to be in satisfaction of a debt or claim of the creditor, member or shareholder.
(3) If at any time a person establishes their entitlement to any money paid to the Receiver General under this Act, the Receiver General must pay the person an equivalent amount out of the Consolidated Revenue Fund.
Marginal note:Vesting in Crown
328 (1) Subject to subsection 326(2) and section 327, property of a cooperative that has not been disposed of at the date of its dissolution under this Act vests in Her Majesty in right of Canada.
Marginal note:Return of property on revival
(2) If a cooperative is revived as a cooperative under section 308, any property, other than money, that vested in Her Majesty under subsection (1) and that has not been disposed of must be returned to the cooperative, and there must be paid to the cooperative out of the Consolidated Revenue Fund
(a) an amount equal to any money received by Her Majesty under subsection (1); and
(b) if property other than money vested in Her Majesty under subsection (1) and the property has been disposed of, an amount equal to the lesser of
(i) the value of the property at the date it vested in Her Majesty, and
(ii) the amount realized by Her Majesty from the disposition of the property.
(3) [Repealed, 2001, c. 14, s. 216]
- 1998, c. 1, s. 328
- 2001, c. 14, s. 216
329 (1) Any interested person may apply, without notice or on any notice that the court may require, to a court having jurisdiction in the place where the cooperative has its registered office for an order directing an investigation to be made of the cooperative and any of its affiliates.
(2) The court may order an investigation to be made of the cooperative and any of its affiliates if, on an application under subsection (1), it appears to the court that the application is neither frivolous nor vexatious and that
(a) the cooperative is not organized, operated or carrying on business on a cooperative basis;
(b) the business or the affairs of the cooperative are not being carried out or conducted in accordance with
(i) the restrictions contained in its articles,
(ii) its by-laws,
(iii) a unanimous agreement, or
(iv) this Act;
(c) the business of the cooperative or any of its affiliates is or has been carried on with intent to defraud a person;
(d) the business or affairs of the cooperative or any of its affiliates are or have been carried on or conducted, or the powers of the directors are or have been exercised, in a manner that is oppressive or unfairly prejudicial to, or that unfairly disregards the interests of, a member or a security holder;
(e) the cooperative or any of its affiliates was formed for a fraudulent or unlawful purpose or is to be dissolved for a fraudulent or unlawful purpose; or
(f) persons concerned with the formation, business or affairs of the cooperative or any of its affiliates have, in connection with the formation, business or affairs of the cooperative, acted fraudulently or dishonestly.
Marginal note:No security for costs
(3) An applicant under this section is not required to give security for costs.
- 1998, c. 1, s. 329
- 2001, c. 14, s. 217(F)
Marginal note:Powers of court
330 (1) In connection with an investigation under this Part, the court may make any order it thinks fit, including an order
(a) to investigate;
(b) appointing an inspector, who may be the Director, and fixing their remuneration, or replacing an inspector;
(c) determining the notice to be given to any interested person, or dispensing with notice to any person;
(d) authorizing an inspector to enter any premises in which the court is satisfied there might be relevant information and to examine any thing and make copies of any document found on the premises;
(e) requiring any person to produce documents to an inspector;
(f) authorizing an inspector to conduct a hearing, administer oaths and examine any person on oath, and setting out rules for the conduct of hearings;
(g) requiring any person to attend a hearing conducted by an inspector and to give evidence on oath;
(h) giving directions to an inspector or any other interested person on any matter arising in the investigation;
(i) requiring an inspector to make an interim or final report to the court;
(j) determining whether a report of an inspector should be published and, if so, ordering its publication in whole or in part or that copies of it be sent to any person the court designates;
(k) requiring an inspector to discontinue the investigation;
(l) if the cooperative is incorporated with membership capital, requiring the cooperative to be continued under the Canada Business Corporations Act, or if it is incorporated without membership capital, requiring it to be dissolved;
(m) determining any matter that relates to the relationship between a member and the cooperative; and
(n) requiring the cooperative to pay the costs of the investigation.
Marginal note:Copy of report
(2) An inspector must send the Director a copy of every report made by the inspector under this Part.
Marginal note:Powers of inspector
331 (1) An inspector appointed under this Part has the powers set out in the order appointing the inspector.
Marginal note:Exchange of information
(2) In addition to the powers set out in the order appointing an inspector, the inspector may provide information to, or exchange information and otherwise cooperate with, any public official in Canada or elsewhere who
(a) is authorized to exercise investigatory powers; and
(b) is investigating, in respect of the cooperative, any allegation of improper conduct that is the same as or similar to the conduct described in subsection 329(2).
Marginal note:Court order
(3) An inspector must, on the request of an interested person, produce a copy of any order made under subsection 330(1).
Marginal note:Hearing in private
332 (1) Any interested person may apply to the court for an order that a hearing under this Part be heard in private and for directions on any matter arising in the investigation.
Marginal note:Right to counsel
(2) A person whose conduct is being investigated or who is being examined at a hearing conducted under this Part has the right to be represented by counsel.
Marginal note:Incriminating statements
333 No person is excused from attending and giving evidence and producing documents to an inspector under this Part by reason only that the evidence tends to incriminate the person or subject the person to a proceeding or penalty, but no such evidence may be used or is receivable against the person in any later proceeding instituted under an Act of Parliament, other than a prosecution for perjury in giving the evidence or a prosecution under section 132 or 136 of the Criminal Code in respect of the evidence.
Marginal note:Absolute privilege — defamation
334 Any oral or written statement or report made by an inspector or other person in an investigation under this Part has absolute privilege.
Marginal note:Membership shares included
335 (1) For the purposes of this section, a security includes a membership share or an interest or right in one.
Marginal note:Information respecting ownership and control
(2) If the Director is satisfied that, for the purposes of Part 9 or 10 or for the purposes of enforcing any regulation made under section 130, there is reason to inquire into the ownership or control of a security of a cooperative or any of its affiliates, the Director may require any person that the Director reasonably believes has or has had an interest or right in the security or acts or has acted on behalf of a person with such an interest or right to report to the Director or to any designated person,
(a) information that the person has or can reasonably be expected to obtain as to present and past interests or rights in the security; and
(b) the names and addresses of the persons who have or have had such an interest or right and of any person who acts or has acted in relation to the security on behalf of such persons.
Marginal note:Deemed interest or right in securities
(3) For the purposes of subsection (2), a person is deemed to hold an interest or right in a security if
(a) in the case of a membership share, the person is or is entitled to be entered in the records of the cooperative as the owner of the membership share; and
(b) in the case of an investment share,
(i) the person has a right to vote or to acquire or dispose of the investment share or an interest or right in it,
(ii) the person’s consent is necessary for the exercise of the rights or privileges of any other person with an interest or right in the investment share, or
(iii) any other person with an interest or right in the investment share can be required or is accustomed to exercise rights or privileges attached to it in accordance with that person’s instructions.
(4) The Director must publish, in a publication generally available to the public, the particulars of information obtained under this section if the particulars
(a) are required by this Act or the regulations to be disclosed; and
(b) have not previously been so disclosed.
- 1998, c. 1, s. 335
- 2011, c. 21, s. 112
- 2018, c. 8, s. 84(F)
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