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

Marginal note:Powers of liquidator

• 321 (1) A liquidator may

  • (a) retain lawyers, notaries, accountants, engineers, appraisers and other professionals;

  • (b) bring, defend or take part in any civil, criminal, administrative, investigative or other action or proceeding in the name and on behalf of the cooperative;

  • (c) carry on the business of the cooperative as required for an orderly liquidation;

  • (d) sell any property of the cooperative by public auction or private sale;

  • (e) do all acts and execute or, in Quebec, sign any documents in the name and on behalf of the cooperative;

  • (f) borrow money on the security of the property of the cooperative;

  • (g) settle or compromise any claims by or against the cooperative; and

  • (h) do all other things necessary for the liquidation of the cooperative and the distribution of its property.

• Marginal note:Due diligence

  (2) A liquidator is not liable under this Part if the liquidator exercised the care, diligence and skill that a reasonably prudent person would have exercised in comparable circumstances, including reliance in good faith on

  • (a) financial statements of the cooperative represented to the liquidator by an officer of the cooperative or in a written report of the auditor of the cooperative fairly to reflect the financial condition of the cooperative; or

  • (b) a report of a person whose profession lends credibility to a statement made by the professional person.

• Marginal note:Application to court

  (3) If a liquidator has reason to believe that any property of the cooperative is in the possession or control of a person or that anyone has concealed, withheld or misappropriated any property of the cooperative, the liquidator may apply to the court for an order requiring the person to appear before the court at the time and place designated in the order and to be examined.

• Marginal note:Power of court

  (4) If the examination discloses that the person has concealed, withheld or misappropriated property of the cooperative, the court may order the person to restore it or pay compensation to the liquidator.

Marginal note:Costs of liquidation

• 322 (1) A liquidator must pay the costs of liquidation out of the property of the cooperative and must pay or make adequate provision for all claims against it.

• Marginal note:Final accounts

  (2) No later than one year after appointment, and after paying or making adequate provision for all claims against the cooperative, the liquidator must apply to the court for

  • (a) approval of the final accounts of the liquidator and, subject to the articles and Parts 20 and 21, an order permitting a distribution in money or in kind of the remaining property of the cooperative to the members and shareholders, if any, according to their respective rights; or

  • (b) an extension of time, setting out the reasons for the extension.

• Marginal note:Application

  (3) If a liquidator fails to make the application required by subsection (2), a member or shareholder may apply to the court for an order for the liquidator to show cause why a final accounting and distribution should not be made.

• Marginal note:Publication

  (4) A liquidator must give notice of their intention to make an application under subsection (2) to the Director, to each inspector appointed under section 316, to each member or shareholder and to any person who provided a security, a fidelity bond or fidelity insurance for the liquidation, and must publish the notice in a newspaper published or distributed in the place where the cooperative has its registered office, in any manner set out in the by-laws or as otherwise directed by the court.

• Marginal note:Final order

  (5) If the court approves the final accounts rendered by a liquidator, the court must make an order

  • (a) directing the Director to issue a certificate of dissolution;

  • (b) directing the custody or disposal of the documents of the cooperative; and

  • (c) discharging the liquidator, subject to the remaining duty required by subsection (6).

• Marginal note:Delivery of order

  (6) The liquidator must send a certified copy of the order described in subsection (5) to the Director without delay.

• Marginal note:Certificate of dissolution

  (7) On receipt of the order described in subsection (5), the Director must issue a certificate of dissolution.

• Marginal note:Effect of certificate

  (8) The cooperative ceases to exist on the date shown in the certificate of dissolution.

Marginal note:Right to distribution in money

323 A member or shareholder may apply to the court for an order requiring the distribution of the property of the cooperative to be in money if, in the course of the liquidation of the cooperative, the members and shareholders resolve or the liquidator proposes to

• (a) exchange all or substantially all the property of the cooperative for securities of another body corporate that are to be distributed to the members and shareholders, if any; or

• (b) distribute all or part of the property of the cooperative to the members and shareholders, if any, in kind.

Marginal note:Powers of court

324 On an application under section 323, the court, subject to the articles and Parts 20 and 21, may order

• (a) that all the property of the cooperative be converted into and distributed in money; or

• (b) that the claims of a member or shareholder applying under this section be satisfied by a distribution in money, in which case subsections 302(19) and (20) apply.

Marginal note:Custody of documents

325 A person who has been granted custody of the documents of a dissolved cooperative remains liable to produce those documents until the end of the prescribed period or of any other shorter period fixed by an order made under subsection 322(5).

Marginal note:Heirs and representatives

• 326 (1) In this section, “member” and “shareholder” include their heirs and personal representatives.

• Marginal note:Continuation of actions

  (2) Despite the dissolution of a cooperative under this Act,

  • (a) a civil, criminal, administrative, investigative or other action or proceeding commenced by or against the cooperative before its dissolution may be continued as if it had not been dissolved;

  • (b) a civil, criminal, administrative, investigative or other action or proceeding may be brought against the cooperative within two years after its dissolution as if it had not been dissolved; and

  • (c) any property that would have been available to satisfy a judgment or order if the cooperative had not been dissolved remains available for those purposes.

• Marginal note:Service

  (3) Service of a document on a cooperative after its dissolution may be effected by serving the document on a person named in the last notice sent under section 81 or 91.

• Marginal note:Reimbursement

  (4) Despite the dissolution of a cooperative under this Act, a member or shareholder to whom any of its property has been distributed is liable to any person claiming under subsection (2) to the extent of the amount distributed to that member or shareholder. An action to enforce the liability may be brought no later than two years after the date of the dissolution of the cooperative.

• Marginal note:Representative action

  (5) A court may order an action referred to in subsection (4) to be brought against the persons who were members or shareholders as a class, subject to any conditions that the court thinks fit, and, if the plaintiff establishes a claim, the court may refer the proceedings to a referee or other officer of the court who may

  • (a) add as a party to the proceedings each member or shareholder who was found by the plaintiff;

  • (b) determine, subject to subsection (4), the amount that each of those members and shareholders must contribute towards satisfaction of the plaintiff’s claim; and

  • (c) direct payment of the amounts so determined.

Marginal note:Unknown claimants

• 327 (1) On the dissolution of a cooperative under this Act, the portion of the property to be distributed to a creditor, member or shareholder who cannot be found must be converted into money and paid to the Receiver General.

• Marginal note:Deemed satisfaction

  (2) A payment under subsection (1) is deemed to be in satisfaction of a debt or claim of the creditor, member or shareholder.

• Marginal note:Recovery

  (3) If at any time a person establishes their entitlement to any money paid to the Receiver General under this Act, the Receiver General must pay the person an equivalent amount out of the Consolidated Revenue Fund.

Marginal note:Vesting in Crown

• 328 (1) Subject to subsection 326(2) and section 327, property of a cooperative that has not been disposed of at the date of its dissolution under this Act vests in Her Majesty in right of Canada.

• Marginal note:Return of property on revival

  (2) If a cooperative is revived as a cooperative under section 308, any property, other than money, that vested in Her Majesty under subsection (1) and that has not been disposed of must be returned to the cooperative, and there must be paid to the cooperative out of the Consolidated Revenue Fund

  • (a) an amount equal to any money received by Her Majesty under subsection (1); and

  • (b) if property other than money vested in Her Majesty under subsection (1) and the property has been disposed of, an amount equal to the lesser of

    • (i) the value of the property at the date it vested in Her Majesty, and

    • (ii) the amount realized by Her Majesty from the disposition of the property.

• (3) [Repealed, 2001, c. 14, s. 216]

PART 18Investigations

Marginal note:Investigation

• 329 (1) Any interested person may apply, without notice or on any notice that the court may require, to a court having jurisdiction in the place where the cooperative has its registered office for an order directing an investigation to be made of the cooperative and any of its affiliates.

• Marginal note:Grounds

  (2) The court may order an investigation to be made of the cooperative and any of its affiliates if, on an application under subsection (1), it appears to the court that the application is neither frivolous nor vexatious and that

  • (a) the cooperative is not organized, operated or carrying on business on a cooperative basis;

  • (b) the business or the affairs of the cooperative are not being carried out or conducted in accordance with

    • (i) the restrictions contained in its articles,

    • (ii) its by-laws,

    • (iii) a unanimous agreement, or

    • (iv) this Act;

  • (c) the business of the cooperative or any of its affiliates is or has been carried on with intent to defraud a person;

  • (d) the business or affairs of the cooperative or any of its affiliates are or have been carried on or conducted, or the powers of the directors are or have been exercised, in a manner that is oppressive or unfairly prejudicial to, or that unfairly disregards the interests of, a member or a security holder;

  • (e) the cooperative or any of its affiliates was formed for a fraudulent or unlawful purpose or is to be dissolved for a fraudulent or unlawful purpose; or

  • (f) persons concerned with the formation, business or affairs of the cooperative or any of its affiliates have, in connection with the formation, business or affairs of the cooperative, acted fraudulently or dishonestly.

• Marginal note:No security for costs

  (3) An applicant under this section is not required to give security for costs.