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

Act current to 2023-01-11 and last amended on 2022-01-01. Previous Versions

PART VIICorporate Governance (continued)

Financial Statements and Auditors (continued)

Auditor (continued)

Marginal note:Auditor’s report

  •  (1) The auditor shall, not less than twenty-one days before the date of the annual meeting of the members, make a report in writing to the members on the annual statement referred to in subsection 292(1).

  • Marginal note:Content of audit

    (2) In each report required under subsection (1), the auditor shall state whether, in the auditor’s opinion, the annual statement presents fairly, in accordance with the accounting principles referred to in subsection 292(4), the financial position of the association as at the end of the financial year to which it relates and the results of the operations and changes in the financial position of the association for that financial year.

  • Marginal note:Auditor’s remarks

    (3) In each report referred to in subsection (2), the auditor shall include such remarks as the auditor considers necessary when

    • (a) the examination has not been made in accordance with the auditing standards referred to in subsection 307(2);

    • (b) the annual statement has not been prepared on a basis consistent with that of the preceding financial year; or

    • (c) the annual statement does not present fairly, in accordance with the accounting principles referred to in subsection 292(4), the financial position of the association as at the end of the financial year to which it relates or the results of the operations or changes in the financial position of the association for that financial year.

Marginal note:Report on directors’ statement

  •  (1) The auditor of an association shall, if required by the members, audit and report to the members on any financial statement submitted by the directors to the members, and the report shall state whether, in the auditor’s opinion, the financial statement presents fairly the information required.

  • Marginal note:Making of report

    (2) A report of the auditor made under subsection (1) shall be attached to the financial statement to which it relates and a copy of the statement and report shall be sent by the directors to every member and the Superintendent.

Marginal note:Report to officers

  •  (1) It is the duty of the auditor of an association to report in writing to the chairperson of the board of directors, the chief executive officer and the chief financial officer of the association any transactions or conditions that have come to the auditor’s attention affecting the well-being of the association that in the auditor’s opinion are not satisfactory and require rectification and, without restricting the generality of the foregoing, the auditor shall, as occasion requires, make a report to those persons in respect of

    • (a) transactions of the association that have come to the auditor’s attention and that in the auditor’s opinion have not been within the powers of the association, and

    • (b) loans owing to the association by any person the aggregate amount of which exceeds one half of one per cent of the regulatory capital of the association and in respect of which, in the auditor’s opinion, loss to the association is likely to occur,

    but when a report required under paragraph (b) has been made in respect of loans to any person, it is not necessary to report again in respect of loans to that person unless, in the opinion of the auditor, the amount of the loss likely to occur has increased.

  • Marginal note:Transmission of report

    (2) Where the auditor of an association makes a report under subsection (1),

    • (a) the auditor shall transmit the report, in writing, to the chairperson of the board of directors, the chief executive officer and the chief financial officer of the association;

    • (b) the report shall be presented to the first meeting of the directors following its receipt;

    • (c) the report shall be incorporated in the minutes of that meeting; and

    • (d) the auditor shall, at the time of transmitting the report under paragraph (a), provide the audit committee of the association and the Superintendent with a copy.

  • 1991, c. 48, s. 312
  • 2005, c. 54, s. 200

Marginal note:Auditor of subsidiaries

  •  (1) An association shall take all necessary steps to ensure that its auditor is duly appointed as the auditor of each of its subsidiaries.

  • Marginal note:Subsidiary outside Canada

    (2) Subsection (1) applies in the case of a subsidiary that carries on its operations in a country other than Canada unless the laws of that country do not permit the appointment of the auditor of the association as the auditor of that subsidiary.

  • Marginal note:Exception

    (3) Subsection (1) does not apply in respect of any particular subsidiary where the association, after having consulted its auditor, is of the opinion that the total assets of the subsidiary are not a material part of the total assets of the association.

Marginal note:Auditor’s attendance

  •  (1) The auditor of an association is entitled to receive notice of every meeting of the audit committee and the conduct review committee of the association and, at the expense of the association, to attend and be heard at those meetings.

  • Marginal note:Attendance

    (2) If so requested by a member of the audit committee, the auditor shall attend every meeting of the audit committee held during the member’s term of office.

  • 1991, c. 48, s. 314
  • 1993, c. 34, s. 53(F)

Marginal note:Calling meeting

  •  (1) The auditor of an association or a member of the audit committee may call a meeting of the audit committee.

  • Marginal note:Right to interview

    (2) The chief internal auditor of an association or any officer or employee of the association acting in a similar capacity shall, at the request of the auditor of the association and on receipt of reasonable notice, meet with the auditor.

Marginal note:Notice of errors

  •  (1) A director or an officer of an association shall forthwith notify the audit committee and the auditor of the association of any error or misstatement of which the director or officer becomes aware in an annual statement or other financial statement on which the auditor or any former auditor has reported.

  • Marginal note:Error noted by auditor

    (2) If the auditor or a former auditor of an association is notified or becomes aware of an error or misstatement in an annual statement or other financial statement on which the auditor reported and in the auditor’s opinion the error or misstatement is material, the auditor or former auditor shall inform each director and the chief executive officer of the association accordingly.

  • Marginal note:Duty of directors

    (3) When under subsection (2) the auditor or a former auditor of an association informs the directors of an error or misstatement in an annual statement or other financial statement, the directors shall

    • (a) prepare and issue a revised annual statement or financial statement; or

    • (b) otherwise inform the members and the Superintendent of the error or misstatement.

Marginal note:Qualified privilege for statements

 Any oral or written statement or report made under this Act by the auditor or a former auditor of an association has qualified privilege.

Remedial Actions

Marginal note:Derivative action

  •  (1) Subject to subsection (2), a complainant or the Superintendent may apply to a court for leave to bring an action under this Act in the name and on behalf of an association or any of its subsidiaries, or to intervene in an action under this Act to which the association or a subsidiary of the association is a party, for the purpose of prosecuting, defending or discontinuing the action on behalf of the association or the subsidiary.

  • Marginal note:Conditions precedent

    (2) No action may be brought and no intervention in an action may be made under subsection (1) by a complainant unless the court is satisfied that

    • (a) the complainant has, not less than 14 days before bringing the application or as otherwise ordered by the court, given notice to the directors of the association or the association’s subsidiary of the complainant’s intention to apply to the court under subsection (1) if the directors of the association or the association’s subsidiary do not bring, diligently prosecute or defend or discontinue the action;

    • (b) the complainant is acting in good faith; and

    • (c) it appears to be in the interests of the association or the subsidiary that the action be brought, prosecuted, defended or discontinued.

  • Marginal note:Notice to Superintendent

    (3) A complainant under subsection (1) shall give the Superintendent notice of the application and the Superintendent may appear and be heard in person or by counsel at the hearing of the application.

  • 1991, c. 48, s. 318
  • 2005, c. 54, s. 201

Marginal note:Powers of court

  •  (1) In connection with an action brought or intervened in under subsection 318(1), the court may at any time make any order it thinks fit including, without limiting the generality of the foregoing,

    • (a) an order authorizing the Superintendent, the complainant or any other person to control the conduct of the action;

    • (b) an order giving directions for the conduct of the action;

    • (c) an order directing that any amount adjudged payable by a defendant in the action be paid, in whole or in part, directly to former and present members or security holders of the association or of the subsidiary instead of to the association or to the subsidiary; and

    • (d) an order requiring the association or the subsidiary to pay reasonable legal fees incurred by the Superintendent or the complainant in connection with the action.

  • Marginal note:Jurisdiction

    (2) Notwithstanding subsection (1), the court may not make any order in relation to any matter that would, under this Act, require the approval of the Minister or the Superintendent.

Marginal note:Status of approval

  •  (1) An application made or an action brought or intervened in under subsection 318(1) or section 322 need not be stayed or dismissed by reason only that it is shown that an alleged breach of a right or duty owed to the association or its subsidiary has been or might be approved by the members or shareholders of the association or subsidiary, but evidence of approval by the members or shareholders may be taken into account by the court in making an order under section 319.

  • Marginal note:Court approval to discontinue

    (2) An application made or an action brought or intervened in under subsection 318(1) or section 322 shall not be stayed, discontinued, settled or dismissed for want of prosecution without the approval of the court given on such terms as the court thinks fit and, if the court determines that the interests of any complainant might be substantially affected by any stay, discontinuance, settlement or dismissal, the court may order any party to the application or action to give notice to the complainant.

Marginal note:No security for costs

  •  (1) A complainant is not required to give security for costs in any application made or any action brought or intervened in under subsection 318(1) or section 322.

  • Marginal note:Interim costs

    (2) In an application made or an action brought or intervened in under subsection 318(1) or section 322, the court may at any time order the association or its subsidiary to pay to the complainant interim costs, including legal fees and disbursements, but the complainant may be held accountable by the court for those interim costs on final disposition of the application or action.

  • 1991, c. 48, s. 321
  • 2005, c. 54, s. 202(F)

Marginal note:Application to rectify records

  •  (1) If the name of a person is alleged to be or to have been wrongly entered or retained in, or wrongly deleted or omitted from, the securities register, the members register or any other record of an association, the association, any member or security holder of the association or any aggrieved person may apply to a court for an order that the register or record be rectified.

  • Marginal note:Notice to Superintendent

    (2) An applicant under this section shall give the Superintendent notice of the application and the Superintendent may appear and be heard in person or by counsel at the hearing of the application.

  • Marginal note:Powers of court

    (3) In connection with an application under this section, the court may make any order it thinks fit including, without limiting the generality of the foregoing,

    • (a) an order requiring the register or other record of the association to be rectified;

    • (b) an order restraining an association from calling or holding a meeting or paying a dividend before the rectification;

    • (c) an order determining the right of a party to the proceedings to have the party’s name entered or retained in, or deleted or omitted from, the registers or records of the association, whether the issue arises between two or more members or security holders or alleged members or security holders, or between the association and any member or security holder or alleged member or security holder; and

    • (d) an order compensating a party who has incurred a loss.

Liquidation and Dissolution

Interpretation and Application

Definition of court

 For the purposes of subsections 330(1) and 331(1) and (2), sections 332 to 336, subsection 337(1), sections 339 and 341 to 343, subsections 347(3) and (4) and section 352, court means a court having jurisdiction in the place where the association has its head office.

Marginal note:Application of subsection (2) and sections 325 to 352

  •  (1) Subsection (2) and sections 325 to 352 do not apply to an association that is insolvent within the meaning of the Winding-up and Restructuring Act.

  • Marginal note:Staying proceedings on insolvency

    (2) Any proceedings taken under this Part to dissolve or to liquidate and dissolve an association shall be stayed if the association is at any time found to be insolvent within the meaning of the Winding-up and Restructuring Act.

  • 1991, c. 48, s. 324
  • 1996, c. 6, s. 167

Marginal note:Returns to Superintendent

 A liquidator appointed under this Part to wind up the business of an association shall provide the Superintendent with such information relating to the business and affairs of the association in such form as the Superintendent requires.

Simple Liquidation

Marginal note:No property and no liabilities

  •  (1) An association that has no property and no liabilities may, if authorized by a special resolution of the members, apply to the Minister for letters patent dissolving the association.

  • Marginal note:Dissolution by letters patent

    (2) Where the Minister has received an application under subsection (1) and is satisfied that all the circumstances so warrant, the Minister may issue letters patent dissolving the association.

  • Marginal note:Effect of letters patent

    (3) An association in respect of which letters patent are issued under subsection (2) ceases to exist on the day stated in the letters patent.

Marginal note:Proposing liquidation

  •  (1) The voluntary liquidation and dissolution of an association, other than an association referred to in subsection 326(1),

    • (a) may be proposed by its directors; or

    • (b) may be initiated by way of a proposal made by a member.

  • Marginal note:Terms must be set out

    (2) A notice of any meeting of members at which the voluntary liquidation and dissolution of an association is to be proposed shall set out the terms of the proposal.

 
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