CONSULTATION DRAFT

Table of Provisions ... continued

Third series of proposals to harmonize federal law with the civil law of the Province of Quebec and to amend certain Acts in order to ensure that each language version takes into account the common law and the civil law.

(2) Subsection 81(2) of the English version of the Act is replaced by the following:

Notice to agent or mandatary

(2) Notice to an authenticating trustee, registrar, transfer agent or other agent or mandatary of an issuer is notice to the issuer with respect to the functions performed by the agent or mandatary.

Explanatory Notes

(2) Existing text of subsection 81(2):

(2) Notice to an authenticating trustee, registrar, transfer agent or other agent of an issuer is notice to the issuer with respect to the functions performed by the agent.


39. (1) The definition "trustee" in subsection 82(1) of the Act is replaced by the following:

"trustee"

« fiduciaire »

"trustee" means any person appointed as trustee, including any person acting as the administrator of the property of others, under the terms of a trust indenture to which a corporation is a party and includes any successor trustee;

(2) The definition "trust indenture" in subsection 82(1) of the English version of the Act is replaced by the following:

"trust indenture"

« acte de fiducie »

"trust indenture" means any deed, indenture or other instrument or act, including any supplement or amendment, made by a corporation after its incorporation or continuance under this Act, under which the corporation issues debt obligations and in which a person is appointed as trustee for the holders of the debt obligations.

Explanatory Notes

Clause 39: (1) and (2) Existing text of the definitions:

"trustee" means any person appointed as trustee under the terms of a trust indenture to which a corporation is a party and includes any successor trustee;

"trust indenture" means any deed, indenture or other instrument, including any supplement or amendment thereto, made by a corporation after its incorporation or continuance under this Act, under which the corporation issues debt obligations and in which a person is appointed as trustee for the holders of the debt obligations issued thereunder.


40. Paragraph 85(5)(c) of the Act is replaced by the following:

(c) any other matter relating to the debt obligations or the affairs of the issuer, guarantor or, in the Province of Quebec, the surety.

Explanatory Notes

Clause 40: Relevant portion of subsection 85(5):

(5) A list obtained under this section shall not be used by any person except in connection with

  • ... 

  • (c) any other matter relating to the debt obligations or the affairs of the issuer or guarantor thereof.


41. (1) The portion of subsection 86(1) of the Act before paragraph (a) is replaced by the following:

Evidence of compliance

86. (1) An issuer, a guarantor or, in the Province of Quebec, a surety of debt obligations issued or to be issued under a trust indenture shall, before doing any act under paragraph (a), (b) or (c), provide the trustee with evidence of compliance with the conditions in the trust indenture relating to

Explanatory Notes

Clause 41: (1) Relevant portion of subsection 86(1):

86. (1) An issuer or a guarantor of debt obligations issued or to be issued under a trust indenture shall, before doing any act under paragraph (a), (b) or (c), furnish the trustee with evidence of compliance with the conditions in the trust indenture relating to


(2) Subsection 86(2) of the Act is replaced by the following:

Duty of issuer, guarantor or surety

(2) On the demand of a trustee, the issuer, guarantor or, in the Province of Quebec, the surety of debt obligations issued or to be issued under a trust indenture shall provide the trustee with evidence of compliance with the trust indenture by the issuer, guarantor or surety in respect of any act to be done by the trustee at their request.

Explanatory Notes

(2) Existing text of subsection 86(2):

(2) On the demand of a trustee, the issuer or guarantor of debt obligations issued or to be issued under a trust indenture shall furnish the trustee with evidence of compliance with the trust indenture by the issuer or guarantor in respect of any act to be done by the trustee at the request of the issuer or guarantor.


42. Paragraph 87(a) of the Act is replaced by the following:

(a) a statutory declaration or certificate made by a director or an officer of the issuer, guarantor or, in the Province of Quebec, a surety stating that the conditions referred to in that section have been complied with; and

Explanatory Notes

Clause 42: Relevant portion of section 87:

87. Evidence of compliance as required by section 86 shall consist of

(a) a statutory declaration or certificate made by a director or an officer of the issuer or guarantor stating that the conditions referred to in that section have been complied with; and


43. Sections 89 and 90 of the Act are replaced by the following:

Trustee may require evidence of compliance

89. (1) On the demand of a trustee, the issuer, guarantor or, in the Province of Quebec, the surety of debt obligations issued under a trust indenture shall provide the trustee with evidence in any form that the trustee may require for compliance with any condition relating to any action required or permitted to be taken by the issuer, guarantor or surety under the trust indenture.

Certificate of compliance

(2) At least once in each 12 month period beginning on the date of the trust indenture and at any other time on the demand of a trustee, the issuer, guarantor or, in the Province of Quebec, the surety of debt obligations issued under a trust indenture shall provide the trustee with a certificate that they have complied with all requirements contained in the trust indenture that, if not complied with, would, with the giving of notice, lapse of time or otherwise, constitute an event of default, or, if there has been failure to so comply, giving particulars of that failure.

Notice of default

90. The trustee shall give to the holders of debt obligations issued under a trust indenture, within 30 days after becoming aware of their occurrence, notice of every event of default arising under the trust indenture and continuing at the time the notice is given, unless the trustee reasonably believes that it is in the best interests of the holders of the debt obligations to withhold the notice and so informs in writing the issuer, guarantor or, in the Province of Quebec, the surety.

Explanatory Notes

Clause 43: Existing text of sections 89 and 90:

89. (1) On the demand of a trustee, the issuer or guarantor of debt obligations issued under a trust indenture shall furnish the trustee with evidence in such form as the trustee may require as to compliance with any condition thereto relating to any action required or permitted to be taken by the issuer or guarantor under the trust indenture.

(2) At least once in each twelve month period beginning on the date of the trust indenture and at any other time on the demand of a trustee, the issuer or guarantor of debt obligations issued under a trust indenture shall furnish the trustee with a certificate that the issuer or guarantor has complied with all requirements contained in the trust indenture that, if not complied with, would, with the giving of notice, lapse of time or otherwise, constitute an event of default, or, if there has been failure to so comply, giving particulars thereof.

90. The trustee shall give to the holders of debt obligations issued under a trust indenture, within thirty days after the trustee becomes aware of the occurrence thereof, notice of every event of default arising under the trust indenture and continuing at the time the notice is given, unless the trustee reasonably believes that it is in the best interests of the holders of the debt obligations to withhold such notice and so informs the issuer and guarantor in writing.


44. Paragraph 91(b) of the French version of the Act is replaced by the following:

bavec le soin, la diligence et la compétence d’un fiduciaire prudent.

Explanatory Notes

Clause 44: Relevant portion of section 91:

91. A trustee in exercising their powers and discharging their duties shall

  • ... 

  • (b) exercise the care, diligence and skill of a reasonably prudent trustee.


2001, c. 14, s. 135 (Sch., s. 30)(E)

45. Section 93 of the Act is replaced by the following:

No exculpation

93. No term of a trust indenture or of any agreement between a trustee and the holders of debt obligations issued under the indenture or between the trustee and the issuer, guarantor or, in the Province of Quebec, the surety shall operate so as to relieve a trustee from the duties imposed on the trustee by section 91.

Explanatory Notes

Clause 45: Existing text of section 93:

93. No term of a trust indenture or of any agreement between a trustee and the holders of debt obligations issued thereunder or between the trustee and the issuer or guarantor shall operate so as to relieve a trustee from the duties imposed on the trustee by section 91.


46. The heading of Part IX of the English version of the Act is replaced by the following:

RECEIVERS, RECEIVER-MANAGERS AND SEQUESTRATORS

Explanatory Notes

Clause 46: Existing text of the heading:

RECEIVERS AND RECEIVER-MANAGERS


2001, c. 14, s. 135 (Sch., s. 31)(E)

47. Sections 94 to 96 of the Act are replaced by the following:

Functions of receiver or sequestrator

94. A receiver or sequestrator of any property of a corporation may, subject to the rights of secured creditors, receive the income from the property and pay the liabilities connected with the property and realize the security interest of those on behalf of whom the receiver is appointed, but, except to the extent permitted by a court, the receiver or sequestrator may not carry on the business of the corporation.

Functions of receiver-manager

95. A receiver-manager of the corporation may carry on any business of the corporation to protect the security interest of those on behalf of whom the receiver is appointed.

Directors’ powers cease

96. If a receiver-manager or sequestrator is appointed by a court or under an instrument or act, the powers of the directors of the corporation that the receiver-manager or sequestrator is authorized to exercise may not be exercised by the directors until the receiver-manager or sequestrator is discharged.

Explanatory Notes

Clause 47: Existing text of sections 94 to 96:

94. A receiver of any property of a corporation may, subject to the rights of secured creditors, receive the income from the property and pay the liabilities connected with the property and realize the security interest of those on behalf of whom the receiver is appointed, but, except to the extent permitted by a court, the receiver may not carry on the business of the corporation.

95. A receiver of a corporation who is also appointed receiver-manager of the corporation may carry on any business of the corporation to protect the security interest of those on behalf of whom the receiver is appointed.

96. If a receiver-manager is appointed by a court or under an instrument, the powers of the directors of the corporation that the receiver-manager is authorized to exercise may not be exercised by the directors until the receiver-manager is discharged.


48. Sections 97 and 98 of the English version of the Act are replaced by the following:

Duty to act

97. A receiver, receiver-manager or sequestrator appointed by a court shall act in accordance with the directions of the court.

Duty under instrument or act

98. A receiver, receiver-manager or sequestrator appointed under an instrument or act shall act in accordance with that instrument or act and any direction of a court made under section 100.

Explanatory Notes

Clause 48: Existing text of sections 97 and 98:

97. A receiver or receiver-manager appointed by a court shall act in accordance with the directions of the court.

98. A receiver or receiver-manager appointed under an instrument shall act in accordance with that instrument and any direction of a court made under section 100.


49. The portion of section 99 of the English version of the Act before paragraph (a) is replaced by the following:

Duty of care

99. A receiver, receiver-manager or sequestrator of a corporation appointed under an instrument or act shall

Explanatory Notes

Clause 49: Relevant portion of section 99:

99. A receiver or receiver-manager of a corporation appointed under an instrument shall


50. (1) The portion of section 100 of the Act before paragraph (a) is replaced by the following:

Directions given by court

100. On an application by a receiver, receiver-manager or sequestrator, whether appointed by a court or under an instrument or act, or on an application by any interested person, a court may make any order it thinks fit including, without limiting the generality of the foregoing,

2001, c. 14, s. 135 (Sch., s. 33)(E)

(2) Paragraphs 100(a) to (e) of the English version of the Act are replaced by the following:

  • (a) an order appointing, replacing or discharging a receiver, receiver-manager or sequestrator and approving their accounts;

  • (b) an order determining the notice to be given to any person or dispensing with notice to any person;

  • (c) an order fixing the remuneration of the receiver, receiver-manager or sequestrator;

  • (d) an order requiring the receiver, receiver-manager or sequestrator, or a person by or on behalf of whom the receiver, receiver-manager or sequestrator is appointed, to make good any default in connection with the receiver’s, receiver-manager’s or sequestrator’s custody or management of the property and business of the corporation, or to relieve any such person from any default on any terms that the court thinks fit, and to confirm any act of the receiver, receiver-manager or sequestrator; and

  • (e) an order giving directions on any matter relating to the duties of the receiver, receiver-manager or sequestrator.

Explanatory Notes

Clause 50: (1) and (2) Existing text of section 100:

100. On an application by a receiver or receiver-manager, whether appointed by a court or under an instrument, or on an application by any interested person, a court may make any order it thinks fit including, without limiting the generality of the foregoing,

  • (a) an order appointing, replacing or discharging a receiver or receiver-manager and approving their accounts;

  • (b) an order determining the notice to be given to any person or dispensing with notice to any person;

  • (c) an order fixing the remuneration of the receiver or receiver-manager;

  • (d) an order requiring the receiver or receiver-manager, or a person by or on behalf of whom the receiver or receiver-manager is appointed, to make good any default in connection with the receiver’s or receiver-manager’s custody or management of the property and business of the corporation, or to relieve any such person from any default on such terms as the court thinks fit, and to confirm any act of the receiver or receiver-manager; and

  • (e) an order giving directions on any matter relating to the duties of the receiver or receiver-manager.


2001, c. 14, s. 135 (Sch., s. 34)(E)

51. (1) The portion of section 101 of the English version of the Act before paragraph (a) is replaced by the following:

Duties of receiver, receiver-manager or sequestrator

101. A receiver, receiver-manager or sequestrator shall

2001, c. 14, s. 135 (Sch., s. 34)(E)

(2) Paragraphs 101(b) to (d) of the English version of the Act are replaced by the following:

  • (b) take into their custody and control the property of the corporation in accordance with the court order or instrument or act under which they are appointed;

  • (c) open and maintain a bank account in their name as receiver, receiver-manager or sequestrator of the corporation for the moneys of the corporation coming under their control;

  • (d) keep detailed accounts of all transactions carried out as receiver, receiver-manager or sequestrator;

Explanatory Notes

Clause 51: (1) and (2) Relevant portion of section 101:

101. A receiver or receiver-manager shall

  • ... 

  • (b) take into their custody and control the property of the corporation in accordance with the court order or instrument under which they are appointed;

  • (c) open and maintain a bank account in their name as receiver or receiver-manager of the corporation for the moneys of the corporation coming under their control;

  • (d) keep detailed accounts of all transactions carried out as receiver or receiver-manager;


52. Paragraphs 105(1)(b) of the Act is replaced by the following:

(b) anyone who is declared incapable by a court in Canada or in another country;

Explanatory Notes

Clause 52: Relevant portion of subsection 105(1):

105. (1) The following persons are disqualified from being a director of a corporation:

  • ... 

  • (b) anyone who is of unsound mind and has been so found by a court in Canada or elsewhere;


2001, c. 14, s. 40

53. Paragraph 109(5)(c) of the English version of the Act is replaced by the following:

(c) a trustee in bankruptcy, receiver, receiver-manager, sequestrator or secured creditor who participates in the management of the corporation or exercises control over its property solely for the purpose of the realization of security or the administration of a bankrupt’s estate, in the case of a trustee in bankruptcy.

Explanatory Notes

Clause 53: Relevant portion of subsection 109(5):

(5) Subsection (4) does not apply to

  • ... 

  • (c) a trustee in bankruptcy, receiver, receiver-manager or secured creditor who participates in the management of the corporation or exercises control over its property solely for the purpose of the realization of security or the administration of a bankrupt’s estate, in the case of a trustee in bankruptcy.


54. (1) Subsection 118(3) of the English version of the Act is replaced by the following:

Recovery of shares

(3) A director who has satisfied a judgment rendered under this section is entitled to recover from the other directors who voted for or consented to the unlawful act on which the judgment was founded their respective shares.

Explanatory Notes

Clause 54: (1) Existing text of subsection 118(3):

(3) A director who has satisfied a judgment rendered under this section is entitled to contribution from the other directors who voted for or consented to the unlawful act on which the judgment was founded.

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