Canada Cooperatives Act (S.C. 1998, c. 1)

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.

• Marginal note:Publication

  (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.

Marginal note:Solicitor-client privilege or professional secrecy

336 Nothing in this Part may be construed as affecting solicitor-client privilege or, in Quebec, the professional secrecy of advocates and notaries.

Marginal note:Inquiries

337 The Director may make inquiries of any person relating to compliance with this Act.

PART 18.1Apportioning Award of Damages

Interpretation and Application

Marginal note:Definitions

337.1 The definitions in this section apply in this Part.

financial interest

financial interest, with respect to a cooperative, includes

• (a) a security;

• (b) a title to or an interest in capital, assets, property, profits, earnings or royalties;

• (c) an option or other interest in, or a subscription to, a security;

• (d) an agreement under which the interest of the purchaser is valued for purposes of conversion or surrender by reference to the value of a proportionate interest in a specified portfolio of assets;

• (e) an agreement providing that money received will be repaid or treated as a subscription for shares, units or interests at the option of any person or the cooperative;

• (f) a profit-sharing agreement or certificate;

• (g) a lease, claim or royalty in oil, natural gas or mining, or an interest in the lease, claim or royalty;

• (h) an income or annuity contract that is not issued by an insurance company governed by an Act of Parliament or a law of a province;

• (i) an investment contract; and

• (j) anything that is prescribed to be a financial interest. (intérêt financier)

financial loss

financial loss means a financial loss arising out of an error, omission or misstatement in financial information concerning a cooperative that is required under this Act or the regulations. (perte financière)

third party

third party includes any subsequent party that is joined in proceedings before a court. (Version anglaise seulement)

Marginal note:Application of Part

• 337.2 (1) This Part applies to the apportionment of damages awarded to a plaintiff for financial loss after a court has found more than one defendant or third party responsible for the financial loss.

• Marginal note:Non-application of Part

  (2) This Part does not apply to an award of damages to any of the following plaintiffs:

  • (a) Her Majesty in right of Canada or of a province;

  • (b) an agent of Her Majesty in right of Canada or of a province or a federal or provincial Crown corporation or government agency, unless a substantial part of its activities involves trading, including making investments in, securities or other financial instruments;

  • (c) a charitable organization, private foundation or public foundation within the meaning of subsection 149.1(1) of the Income Tax Act; or

  • (d) an unsecured creditor in respect of goods or services that the creditor provided to a cooperative.

Apportionment of Damages

Marginal note:Degree of responsibility

• 337.3 (1) Subject to this section and sections 337.4 to 337.6, every defendant or third party who has been found responsible for a financial loss is liable to the plaintiff only for the portion of the damages that corresponds to their degree of responsibility for the loss.

• Marginal note:Uncollectable amounts

  (2) If any part of the damages awarded against a responsible defendant or third party is uncollectable, the court may, on the application of the plaintiff, reallocate that amount to the other responsible defendants or third parties, if the application is made within one year after the date that the judgment was made enforceable.

• Marginal note:Reallocation

  (3) The amount that may be reallocated to each of the other responsible defendants or third parties under subsection (2) is calculated by multiplying the uncollectable amount by the percentage that corresponds to the degree of responsibility of that defendant or third party for the total financial loss.

• Marginal note:Maximum amount

  (4) The maximum amount determined under subsection (3), in respect of any responsible defendant or third party, may not be more than fifty per cent of the amount originally awarded against that responsible defendant or third party.

Marginal note:Exception — fraud

• 337.4 (1) The plaintiff may recover the whole amount of the damages awarded by the court from any defendant or third party who has been held responsible for a financial loss if it was established that the defendant or third party acted fraudulently or dishonestly.

• Marginal note:Contribution

  (2) The defendant or third party referred to in subsection (1) is entitled to claim contribution from any other defendant or third party who is held responsible for the loss.

Joint and Several, or Solidary, Liability

Marginal note:Individual or personal body corporate

• 337.5 (1) Defendants and third parties referred to in subsection 337.2(1) are jointly and severally, or solidarily, liable for the damages awarded to a plaintiff who is an individual or a personal body corporate and who

  • (a) had a financial interest in a cooperative on the day that an error, omission or misstatement in financial information concerning the cooperative occurred, or acquired a financial interest in the period between the day that the error, omission or misstatement occurred and the day, as determined by the court, that it was generally disclosed; and

  • (b) has established that the value of the plaintiff’s total financial interest in the cooperative was not more than the prescribed amount at the close of business on the day that the error, omission or misstatement occurred or at the close of business on any day that the plaintiff acquired a financial interest in the period referred to in paragraph (a).

• Marginal note:Exception

  (1.1) Subsection (1) does not apply when the plaintiff brings the action as a member of a partnership or other association or as a trustee in bankruptcy, liquidator, receiver or sequestrator of a body corporate.

• Marginal note:Interpretation

  (2) For the purposes of this section,

  • (a) a personal body corporate is a body corporate that is not actively engaged in any financial, commercial or industrial business and that is controlled by an individual, or by a group of individuals who are connected by marriage, common-law partnership or any legal parent-child relationship or are connected indirectly by a combination of those relationships, whether or not the individuals through whom they are connected are members of the group; and

  • (b) a common-law partnership is a relationship between two persons who are cohabiting with each other in a conjugal relationship and have done so for a period of at least one year.