Cooperative Credit Associations Act (S.C. 1991, c. 48)

Marginal note:Deposit of proxies

166.03 The directors may specify, in a notice calling a meeting of shareholders or a continuation of a meeting of shareholders after an adjournment, a time before which executed forms of proxy to be used at the meeting or the continued meeting must be deposited with the association or its transfer agent. The time specified may not be more than forty-eight hours, excluding Saturdays and holidays, before the meeting or the continued meeting.

Marginal note:Mandatory solicitation

• 166.04 (1) Subject to subsection 148(2) and subsection (2), the management of an association shall, concurrently with giving notice of a meeting of shareholders, send a form of proxy in prescribed form to each shareholder entitled to receive notice of the meeting.

• Marginal note:Exception

  (2) The management of an association is not required to send a form of proxy under subsection (1) if the association

  • (a) is not a distributing association; and

  • (b) has 50 or fewer shareholders who are entitled to vote at a meeting, two or more joint holders of a share being counted as one shareholder.

Marginal note:Soliciting proxies

• 166.05 (1) A person shall not solicit proxies unless

  • (a) in the case of solicitation by or on behalf of the management of an association, a management proxy circular in prescribed form, either as an appendix to, or as a separate document accompanying, the notice of the meeting is sent to the auditor of the association and to each shareholder whose proxy is solicited; and

  • (b) in the case of any other solicitation, a dissident’s proxy circular in prescribed form stating the purposes of the solicitation is sent to the auditor of the association, to each shareholder whose proxy is solicited and to the association.

• Marginal note:Copy to Superintendent

  (2) A person who sends a management proxy circular or dissident’s proxy circular shall at the same time file with the Superintendent

  • (a) in the case of a management proxy circular, a copy of it together with a copy of the notice of meeting, form of proxy and any other documents for use in connection with the meeting; and

  • (b) in the case of a dissident’s proxy circular, a copy of it together with a copy of the form of proxy and any other documents for use in connection with the meeting.

• Marginal note:Exemption by Superintendent

  (3) On the application of an interested person, the Superintendent may, on any terms that the Superintendent thinks fit, exempt the person from any of the requirements of subsection (1) and section 166.04, and the exemption may be given retroactive effect.

• Marginal note:Reporting exemptions

  (4) The Superintendent shall set out in a periodical available to the public the particulars of each exemption granted under subsection (3) together with the reasons for the exemption.

Marginal note:Attendance at meeting

• 166.06 (1) A person who solicits a proxy and is appointed proxyholder shall attend in person or cause an alternate proxyholder to attend every meeting in respect of which the proxy is valid, and the proxyholder or alternate proxyholder shall comply with the directions of the shareholder who executed the form of proxy.

• Marginal note:Rights of proxyholder

  (2) A proxyholder or an alternate proxyholder has the same rights as the appointing shareholder to speak at a meeting of shareholders in respect of any matter, to vote by way of ballot at the meeting and, except where a proxyholder or an alternate proxyholder has conflicting instructions from more than one shareholder, to vote at the meeting in respect of any matter by way of a show of hands.

• Marginal note:Vote by show of hands

  (3) Despite subsections (1) and (2) and unless a shareholder or proxyholder demands a ballot, if the chairperson of a meeting of shareholders declares to the meeting that, if a ballot were conducted, the total number of votes attached to shares represented at the meeting by proxy required to be voted against what, to the knowledge of the chairperson, would be the decision of the meeting on a matter or group of matters is less than 5% of all the votes that might be cast by shareholders in person or by proxy,

  • (a) the chairperson may conduct the vote in respect of that matter or group of matters by way of a show of hands; and

  • (b) a proxyholder or alternate proxyholder may vote in respect of that matter or group of matters by way of a show of hands.

Marginal note:Duty of intermediary

• 166.07 (1) Shares of an association that are registered in the name of an intermediary or an intermediary’s nominee and not beneficially owned by the intermediary may not be voted unless the intermediary sends to the beneficial owner

  • (a) a copy of the notice of the meeting, annual statement, management proxy circular and dissident’s proxy circular and any other documents, other than the form of proxy, that were sent to shareholders by or on behalf of any person for use in connection with the meeting; and

  • (b) a written request for voting instructions except if the intermediary has already received written voting instructions from the beneficial owner.

• Marginal note:When documents to be sent

  (2) The intermediary shall send the documents referred to in subsection (1) without delay after they receive the documents referred to in paragraph (1)(a).

• Marginal note:Restriction on voting

  (3) An intermediary or a proxyholder appointed by them may not vote shares that the intermediary does not beneficially own and that are registered in the name of the intermediary or their nominee unless the intermediary or proxyholder, as the case may be, receives written voting instructions from the beneficial owner.

• Marginal note:Copies

  (4) A person by or on behalf of whom a solicitation is made shall on request and without delay provide the intermediary, at the person’s expense, with the necessary number of copies of the documents referred to in paragraph (1)(a).

• Marginal note:Instructions to intermediary

  (5) The intermediary shall vote or appoint a proxyholder to vote in accordance with any written voting instructions received from the beneficial owner.

• Marginal note:Beneficial owner as proxyholder

  (6) If a beneficial owner so requests and provides an intermediary with the appropriate documentation, the intermediary shall appoint the beneficial owner or a nominee of the beneficial owner as proxyholder.

• Marginal note:Effect of intermediary’s failure to comply

  (7) The failure of an intermediary to comply with any of subsections (1) to (6) does not render void any meeting of shareholders or any action taken at the meeting.

• Marginal note:Intermediary may not vote

  (8) Nothing in this Part gives an intermediary the right to vote shares that they are otherwise prohibited from voting.

Marginal note:Exemption

166.071 The Governor in Council may make regulations respecting the conditions under which an association is exempt from any of the requirements of sections 166.02 to 166.07.

Marginal note:Restraining order

• 166.08 (1) If a form of proxy, management proxy circular or dissident’s proxy circular contains an untrue statement of a material fact or omits to state a material fact that is required to be contained in it or that is necessary to make a statement contained in it not misleading in light of the circumstances in which the statement is made, an interested person or the Superintendent may apply to a court and the court may make any order it thinks fit including,

  • (a) an order restraining the solicitation or the holding of the meeting, or restraining any person from implementing or acting on a resolution passed at the meeting, to which the form of proxy, management proxy circular or dissident’s proxy circular relates;

  • (b) an order requiring correction of any form of proxy or proxy circular and a further solicitation; and

  • (c) an order adjourning the meeting.

• Marginal note:Notice of application

  (2) Where a person other than the Superintendent is an applicant under subsection (1), the applicant shall give notice of the application to the Superintendent and the Superintendent is entitled to appear and to be heard in person or by counsel.

Directors and Officers

Duties

Marginal note:Duty to manage

• 167 (1) Subject to this Act, the directors of an association shall manage or supervise the management of the business and affairs of the association.

• Marginal note:Specific duties

  (2) Without limiting the generality of subsection (1), the directors of an association shall

  • (a) establish an audit committee to perform the duties referred to in subsections 199(3) and (4);

  • (b) establish a conduct review committee to perform the duties referred to in subsection 200(3);

  • (c) establish procedures to resolve conflicts of interest, including techniques for the identification of potential conflict situations and for restricting the use of confidential information;

  • (d) designate a committee of the board of directors to monitor the procedures referred to in paragraph (c);

  • (e) establish investment and lending policies, standards and procedures in accordance with section 387;

  • (f) in the case of a retail association, establish procedures to provide disclosure of information to customers of the association that is required to be disclosed by this Act and for dealing with complaints as required by section 385.22; and

  • (g) designate a committee of the board of directors to monitor the procedures referred to in paragraph (f) and satisfy itself that they are being adhered to by the retail association.

Marginal note:Duty of care

• 168 (1) Every director and officer of an association in exercising any of the powers of a director or an officer and discharging any of the duties of a director or an officer shall

  • (a) act honestly and in good faith with a view to the best interests of the association; and

  • (b) exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.

• Marginal note:Duty to comply

  (2) Every director, officer and employee of an association shall comply with this Act, the regulations, the association’s incorporating instrument and the by-laws of the association.

• Marginal note:No exculpation

  (3) No provision in any contract, in any resolution or in the by-laws of an association relieves any director, officer or employee of the association from the duty to act in accordance with this Act and the regulations or relieves a director, officer or employee from liability for a breach thereof.

Qualification and Number — Directors

Marginal note:Minimum number of directors

• 169 (1) An association shall have at least seven directors.

• Marginal note:Residency requirement

  (2) The majority of the directors of an association must be, at the time of each director’s election or appointment, resident Canadians.

Marginal note:Disqualified persons

170 The following persons are disqualified from being directors of an association:

• (a) a person who is less than eighteen years of age;

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

• (c) a person who has the status of a bankrupt;

• (d) a person who is not a natural person;

• (e) and (f) [Repealed, 1994, c. 47, s. 51]

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

• (h) a person who is an agent or employee of the government of a foreign country or any political subdivision thereof.

Marginal note:Limit on directors

171 No more than 15 per cent of the directors of an association may, at each director’s election or appointment, be employees of the association or a subsidiary of the association.

Election and Tenure — Directors

Marginal note:Number of directors

• 172 (1) Subject to subsection 169(1), the members of an association shall, by by-law, determine the number of directors or the minimum and maximum number of directors.

• Marginal note:Content of by-law

  (2) A by-law made pursuant to subsection (1) shall set out the manner in which directors are nominated, appointed or elected, but no by-law that decreases the number of directors shortens the term of an incumbent director.

• Marginal note:Election at annual meeting

  (3) A by-law made pursuant to subsection (1) that provides for a minimum and maximum number of directors may provide that the number of directors to be appointed or elected at any annual meeting be such number as is fixed by the directors prior to the annual meeting.

Marginal note:Election or appointment as director

172.1 The election or appointment of a person as a director is subject to the following:

• (a) the person was present at the meeting when the election or appointment took place and did not refuse to hold office as a director; or

• (b) the person was not present at the meeting when the election or appointment took place but

  • (i) consented in writing to hold office as a director before the election or appointment or within 10 days after it, or

  • (ii) acted as a director after the election or appointment.

Marginal note:Voting by shareholders

173 Where shareholders of an association are entitled to elect one or more directors of an association, no more than one third of the directors may be elected by the shareholders.

Marginal note:Term of directors

• 174 (1) An association may, by by-law, provide that the directors be appointed or elected for terms of one, two or three years.

• Marginal note:Term of one, two or three years

  (2) A director appointed or elected for a term of one, two or three years holds office until the close of the first, second or third annual meeting following the appointment or election of the director.

• Marginal note:No stated term

  (3) A director who is not appointed or elected for an expressly stated term of office ceases to hold office at the close of the next annual meeting following the appointment or election of the director.

• Marginal note:Tenure of office

  (4) It is not necessary that all directors appointed or elected at a meeting hold office for the same term.

• Marginal note:Idem

  (5) If a by-law of an association provides that the directors be appointed or elected for a term of two or three years, it may also provide that the term of office of each director be for the whole of that term, or that, as nearly as may be, one half of the directors retire each year if the term is two years, and that one third of the directors retire each year if the term is three years.

• Marginal note:Composition requirements

  (6) Where a director of an association is appointed or elected for a term of more than one year, the association shall comply with subsection 169(2) and section 171 at each annual meeting during the director’s term of office as if that director were appointed or elected on that date.