Part 20 Remedies (clauses 116-120)

The section dealing with appeals from the Director's decision would be amended to clarify the right of appeal of a person who feels aggrieved by a decision made by the Director. In addition, the list of appealable decisions would be expanded (s. 246).

A number of consequential amendments required as a result of amendments to other parts of the Act are included in this Part. In addition, several minor technical amendments, amendments to the French version and amendments designed to clarify and facilitate the efficient operation and administration of the statute are included.

Briefing Book
An Act to amend the Canada Business Corporations Act and the Canada Cooperatives Act

Bill Clause No. 116
CBCA Section No. 239(2)(a)
Topic  Remedies, Offences and Punishment (Technical Amendments)

Sources of Proposed Law 

Changes From Present Law 
Replace paragraph 239(2)(a) with a new paragraph that replaces the reasonable notice requirement with a 14 day notice requirement and gives the courts the discretion to order otherwise.

Purpose of Change 
Under the current version of paragraph 239(2)(a), the court will not grant leave to commence a derivative action without first being satisfied that "reasonable notice" was given to the directors. This adds an element of uncertainty to the proceedings. The amendment will add clarity and certainty. One disadvantage is that if an emergency situation arises and the shareholders feel they must act quickly, 14 days notice may not be possible. For this reason, some discretion is given to the courts to order a shorter notice period if necessary.

Similar Provincial Laws 
Business Corporations Act (Ontario)

Current Wording 
239. (1) A security holder or the Director may apply, ex parte or on such notice as the court may require, to a court having jurisdiction in the place where the corporation has its registered office for an order directing an investigation to be made of the corporation and any of its affiliated corporations.

(2) If, on an application under subsection (1), it appears to the court that

(a) the complainant has given reasonable notice to the directors of the corporation or its subsidiary of his intention to apply to the court under subsection (1) if the directors of the corporation or its subsidiary do not bring, diligently prosecute or defend or discontinue the action;

Proposed Wording  239. (2)(a) the complainant has given notice to the directors of the corporation or its subsidiary of the complainant's intention to apply to the court under subsection (1) not less than fourteen days before bringing the application, or as otherwise ordered by the court, if the directors of the corporation or its subsidiary do not bring, diligently prosecute or defend or discontinue the action;

Bill Clause No. 117
CBCA Section No. 241(2) and 241(2)(b)
Topic  Remedies, Offences and Punishment (Technical Amendments)

Sources of Proposed Law 

Changes From Present Law 
Include in the French version of s. 241 the concept of "unfairly" found in the English version.

Amend the French version of subs. 241(2)(b) by replacing the words "affaires tant commerciales qu'internes" with "ses activités commerciales ou ses affaires internes".

Purpose of Change 
These technical changes clarify the wording and application of the Act.

Similar Provincial Laws 

Current Wording 
241. (2) Le tribunal, saisi d'une demande visée au paragraphe (1), peut, par ordonnance, redresser la situation provoquée par la société ou l'une des personnes morales de son groupe qui, à son avis, abuse des droits des détenteurs de valeurs mobilières, créanciers, administrateurs ou dirigeants, ou porte atteinte à leurs intérêts ou n'en tient pas compte :

…

b) soit par la façon don't elle conduit ses affaires tant commerciales qu'internes

Proposed Wording 
241. (2) Le tribunal saisi d'une demande visée au paragraphe (1) peut, par ordonnance, redresser la situation provoquée par la société ou l'une des personnes morales de son groupe qui, à son avis, abuse des droits des détenteurs de valeurs mobilières, créanciers, administrateurs ou dirigeants, ou, se montre injuste à leur égard en leur portant préjudice ou en ne tenant pas compte de leurs intérêts :

b) soit par la façon dont elle conduit ses activités commerciales ou ses affaires internes;

Bill Clause No. 118
CBCA Section No. 242(3)
Topic  Remedies, Offences and Punishment (Technical Amendments)

Sources of Proposed Law 

Changes From Present Law 
Replace in the French version of s. 242(3) the word "caution" with the word "cautionnement" where the provision incorrectly uses this term in relation to the security mechanism (as opposed to the person who provides the security, which is the correct use of the word "caution").

Purpose of Change 
This technical change clarifies the wording and application of the Act.

Similar Provincial Laws 

Current Wording 
242. (3) Les plaignants ne sont pas tenus de fournir caution pour les frais des demandes, actions ou interventions visées à la présente partie.

Proposed Wording 
242. (3) Les plaignants ne sont pas tenus de fournir de cautionnement pour les frais des demandes, actions ou interventions visées à la présente partie.

Bill Clause No. 119
CBCA Section No. 246
Topic Remedies, Offences and Punishment (Government Administration)

Sources of Proposed Law 

Changes From Present Law -
Clarification of the right of appeal of a person who feels aggrieved by a decision made by the Director. Addition of new decisions to the list of decisions that are appealable.

Purpose of Change 
The general purpose of these changes is to ensure that justice is served. The proposed changes are made to clarify the decisions that may be appealed:

- subs.(c): Currently, only the decision to refuse an exemption is appealable. However, the CBCA Director may impose reasonable terms as a condition for the exemption, to protect interested parties. These terms may be onerous, or perhaps in the eyes of a third party who may be prejudiced, not onerous enough. A third party might even feel that the exemption should not be granted on any terms.

- subs. (e): Allows a right of appeal concerning decisions made in respect of the new s. 263.1 (clause 129), which allows the Director to issue certificates attesting to a corporations existence at a particular date.

- subs.(f): Currently, only the decision to refuse a revival is appealable. However, the CBCA Director may impose reasonable terms as a condition for the revival of the corporation, to protect interested parties. These terms may be onerous, or perhaps in the eyes of a third party who may be prejudiced, not onerous enough. A third party might even feel that the revival should not be granted on any terms.

- subs. (f.1) and (f.2): Add new decisions which may be appealed under this section.

Similar Provincial Laws 

Current Wording 
246. A person who feels aggrieved by a decision of the Director

(a) to refuse to file in the form submitted to him any articles or other document required by this Act to be filed by him,

(b) to give a name, to change or revoke a name, or to refuse to reserve, accept, change or revoke a name under section 12,

(c) to refuse to grant an exemption under subsection 2(8), 10(2), 82(3), 127(8), 151(1), section 156, subsection 163(4) or 171(2) or subsection 160(3) and any regulations under that subsection,

(d) to refuse under subsection 187(11) to permit a continued reference to shares having a nominal or par value,

(e) to refuse to issue a certificate of discontinuance under section 188,

(f) to refuse to revive a corporation under section 209, or

(g) to dissolve a corporation under section 212,

may apply to a court for an order requiring the Director to change his decision, and on such application the court may so order and make any further order it thinks fit.

Proposed Wording 
246. A person who feels aggrieved by a decision of the Director referred to in any of paragraphs (a) to (g) may apply to a court for an order, including an order requiring the Director to change the decision

(a) to refuse to file in the form submitted any articles or other document required by this Act to be filed;

(b) to give a name, to change or revoke a name, or to refuse to reserve, accept, change or revoke a name under section 12;

(c) to grant, or to refuse to grant, an exemption that may be granted under this Act and the regulations;

(d) to refuse under subsection 187(11) to permit a continued reference to shares having a nominal or par value;

(e) to refuse to issue a certificate of discontinuance under section 188 or a certificate attesting that as of a certain date the corporation exists under subsection 263.1(2);

(f) to issue, or to refuse to issue, a certificate of revival under section 209, or the decision with respect to the terms for revival imposed by the Director;

(f.1) to correct, or to refuse to correct, articles, a notice, a certificate or other document under section 265;

(f.2) to cancel, or to refuse to cancel, the articles and related certificate under section 265.1; or

(g) to dissolve a corporation under section 212.

The Court may make any order it thinks fit.

Bill Clause No. 120
CBCA Section No. 249(1) and new (2)
Topic  Remedies, Offences and Punishment (Government Administration)

Sources of Proposed Law 

Changes From Present Law 
Clarification that only final court orders are appealable as of right. Further clarification that a judge of the court of appeal may grant leave to appeal any order by a lower court.

Purpose of Change
Section 249 provides that "An appeal lies to the court of appeal from any order made by a court under this Act." Generally, under provincial rules of court, only final orders are appealable so that litigants cannot tie up the court process and use procedural delays to prevent timely hearing of cases. The proposed change will prevent improper appeals of interim orders made under this Act and unnecessary use of court time.

Similar Provincial Laws 

Current Wording 
249. An appeal lies to the court of appeal from any order made by a court under this Act.

Proposed Wording 
249. (1) An appeal lies to the court of appeal of a province from any final order made by a court of that province under this Act.

(2) An appeal lies to the court of appeal of a province from any order other than a final order made by a court of that province, only with leave of the court of appeal in accordance with the rules applicable to that court.