Port Authorities Management Regulations (SOR/99-101)

Resolution in lieu of Meeting

• 15 (1) A resolution in writing signed by all the directors entitled to vote on the resolution is as valid as if it had been passed at a meeting of the board of directors or of a committee of directors, as the case may be.

• (2) A copy of every resolution shall be kept with the minutes of the proceedings of the board or committee.

Dissent of Directors

• 16 (1) A director of a port authority who is present at a meeting of the board of directors or of a committee of directors, whether the director abstains from voting on a resolution or an action to be taken at the meeting or remains silent, is deemed to have consented to any resolution passed or action taken at the meeting, unless

  • (a) the director requests that a dissent be entered in the minutes of the meeting or a dissent is so entered;

  • (b) the director sends a written dissent to the secretary of the meeting before the meeting is adjourned; or

  • (c) the director sends a dissent by registered mail, or delivers it, to the registered office of the port authority immediately after the meeting is adjourned.

• (2) A director who votes for or expressly consents to a resolution is not entitled to dissent.

• (3) A director who is not present at a meeting at which a resolution is passed or an action taken is deemed to have consented to the resolution or action unless, within seven days after becoming aware of the resolution or action, the director

  • (a) requests that a dissent be kept with the minutes of the meeting; or

  • (b) sends a dissent by registered mail, or delivers it, to the registered office of the port authority.

• (4) Subsection (3) does not apply to directors who absent themselves from a meeting in conformity with the code of conduct set out in the letters patent.

Validity of Acts of Directors and Officers

17 An act of a director or officer of a port authority is valid despite any irregularity in their appointment or election or any defect in their qualification.

Failure to Disclose a Material Contract

18 If a director or officer fails to disclose an interest in a material contract in accordance with the code of conduct set out in the letters patent, a court may, on the application of the Minister or the port authority, set aside the contract on such terms as it thinks fit.

Liability of Directors

19 The directors of a port authority are jointly and severally, or solidarily, liable to the employees of the port authority for all debts not exceeding six months wages payable for services performed by the employees for the port authority during the period in which the directors held office.

• 20 (1) A director is not liable under section 19 for any amount in respect of statutory or contractual termination of employment, for severance pay or for any punitive damages related to termination of employment.

• (2) A director is not liable under section 19 unless

  • (a) the port authority is sued for the debt within six months after it becomes due and execution is returned unsatisfied in whole or in part;

  • (b) the debt is proved within six months after the earlier of the day of issue of the notice of intention to dissolve and the day of issue of the certificate of dissolution; or

  • (c) the port authority makes an assignment or is made subject to a receiving order under the Bankruptcy and Insolvency Act and a claim for the debt is proved no later than six months after the date of the assignment or receiving order.

• (3) A director is not liable under section 19 unless the director is sued for the debt while in office or within two years after ceasing to be in office.

21 If execution has issued, the amount recoverable from a director is the amount remaining unsatisfied after execution.

• 22 (1) If a director satisfies a debt referred to in section 19 that is proved in liquidation and dissolution or bankruptcy proceedings, the director is entitled to any preference to which the employee would have been entitled and, if a judgment has been obtained, the director is entitled to an assignment of the judgment.

• (2) A director who satisfies a debt referred to in section 19 is entitled to contribution from the other directors who were liable for the debt.

• 23 (1) Directors who vote for or consent to resolutions authorizing any of the following matters are jointly and severally, or solidarily, liable to restore to the port authority any amounts or property so distributed or paid and not otherwise recovered by the port authority:

  • (a) financial assistance contrary to section 32; and

  • (b) payment of an indemnity or advance contrary to section 25 or 28.

• (2) A director who satisfies a judgment for a debt owed under this section is entitled to contribution from the other directors who were liable for the debt.

• (3) A director who is liable under subsection (1) may apply to a court for an order to recover money or property mentioned in that subsection.

• (4) A court may, on application under subsection (3), if it is satisfied that it is equitable to do so,

  • (a) order any person to pay or deliver to the director the money or property mentioned in subsection (1); or

  • (b) make any order that it sees fit.

• (5) An action to enforce a liability imposed by this section may not be commenced more than two years after the date of the resolution authorizing the action complained of.

Defence of Due Diligence

24 A director is not liable under any of sections 19 or 21 to 23 if the director exercised the care, diligence and skill that a reasonably prudent person would have exercised in comparable circumstances to prevent a failure to fulfil their duties, including reliance in good faith on financial statements of the port authority, on the reports of experts and on information presented by officers or professionals.

Indemnities and Advances

• 25 (1) A port authority may indemnify a person who is a director or officer of the port authority, or a former director or officer, against all the costs, charges and expenses, including an amount paid to settle an action or satisfy a claim, reasonably incurred by the person in respect of any civil, criminal, administrative, investigative or other proceeding in which the person is involved by reason of being or having been a director or officer of the port authority.

• (2) A port authority may not indemnify a person under subsection (1) unless

  • (a) the person acted honestly and in good faith with a view to the best interests of the port authority; and

  • (b) in the case of a criminal or administrative proceeding, the person had reasonable grounds for believing that the conduct was lawful.

• (3) A port authority may not indemnify a person under subsection (1) in respect of an action by or on behalf of the port authority against the person unless a court so orders.

26 Despite subsection 25(1), a person referred to in subsection 25(1) is entitled to indemnity for the costs, charges and expenses referred to in that subsection if the person

• (a) was not judged by a court to have committed any fault or omitted to do anything that the person ought to have done; and

• (b) fulfils the conditions prescribed in subsection 25(2).

• 27 (1) A court may, on application by a port authority or a person referred to in section 26, approve an indemnity referred to in that section and make any further order that it sees fit.

• (2) The court may, in respect of the application, order notice to be given to any interested person and the person is entitled to appear and be heard in person or by counsel.

• 28 (1) A port authority may advance moneys to a person who is a director or officer of the port authority, or a former director or officer, in respect of all the costs, charges and expenses that the person may reasonably incur in respect of any civil, criminal, administrative, investigative or other proceeding in which the person is involved by reason of being or having been a director or officer of the port authority, including an amount to settle an action or satisfy a claim.

• (2) A port authority may not advance moneys to a person under subsection (1) in respect of an action by or on behalf of the port authority against the person unless a court so orders.

29 If an advance is made under subsection 28(1), the person shall repay the moneys if a court judges that the person did not fulfil the conditions prescribed in subsection 25(2).

Remuneration of Officers

30 Unless the letters patent or by-laws provide otherwise, the board of directors of a port authority may fix the remuneration of the officers or employees of the port authority.

PART 3Financial Matters

Categories of Investments

31 For the purposes of paragraph 32(b) of the Act, a port authority may invest in the following categories of investments:

• (a) an investment in a subsidiary that the port authority is authorized to incorporate under its letters patent;

• (b) any debt that, on the day on which the debt is acquired, is of a category of investments that meets the requirements set out in the schedule; and

• (c) an investment made in accordance with the Pension Benefits Standards Act, 1985 and the regulations made under that Act if the moneys invested are moneys of a pension fund for a pension plan that is administered by the port authority and registered in accordance with that Act.

Financial Assistance

• 32 (1) Subject to the letters patent, a port authority or a body corporate controlled by a port authority shall not, directly or indirectly, give financial assistance by means of a loan, guarantee or otherwise to

  • (a) any of its directors, officers or employees, a shareholder of the body corporate or an associate of any of them; or

  • (b) any person for the purpose of or in connection with a purchase of a share issued or to be issued by the body corporate.

• (2) For the purposes of subsection (1), “associate” has the meaning assigned in subsection 2(1) of the Canada Business Corporations Act.

Annual Financial Statements

Content of Annual Financial Statements

33 The annual financial statements required by section 36 of the Act need not be designated by the names set out in subsection 37(2) of the Act.

34 Every port authority and every wholly-owned subsidiary of a port authority shall, in its annual financial statements, set out comparative information from the previous fiscal year’s annual financial statements.

• 35 (1) A port authority and a wholly-owned subsidiary of a port authority shall each ensure that its annual financial statements include at least the following information:

  • (a) wages, salaries and employee benefits;

  • (b) professional fees and fees for consulting services;

  • (c) maintenance and repair costs;

  • (d) depreciation of fixed assets; and

  • (e) real property taxes and grants in lieu of taxes.

• (2) A port authority shall ensure that its annual financial statements include the name, title and total remuneration — incorporating fees, allowances and other benefits — of each of the four persons who, in that fiscal year, held office with or were employed by one or more members of the corporate group made up of the port authority and its wholly-owned subsidiaries, and who received the highest remuneration from the group overall.

• (3) Subsection (2) applies only if the remuneration in the fiscal year exceeds

  • (a) in respect of a fiscal year that ends on or before December 31, 1999, $100,000; and

  • (b) in respect of a fiscal year that ends on or before December 31 of each subsequent year, the amount established in the previous year, adjusted on January 1 of that subsequent year by the change in the consumer price index between the two previous years.

• (4) The consumer price index for any year is the annual average all-items consumer price index for Canada (not seasonally adjusted) published by Statistics Canada in respect of that year.

• (5) The chief executive officer and the directors of the port authority or a wholly-owned subsidiary shall not be counted for the purpose of subsection (2).

• (6) If more than four persons qualify as receiving the highest remuneration because some of them receive the same remuneration, the prescribed information on all of them shall be included in the financial statements.

36 A port authority and a wholly-owned subsidiary of a port authority shall each ensure that its annual financial statements include the following information:

• (a) total estimated capital expenditures, including those authorized or committed at year end, and, in respect of each capital project for which the combined capital expenditures are estimated to exceed $1 million, a brief description of the project and the amount of the expenditures; and

• (b) total estimated proceeds from capital dispositions, including dispositions authorized, committed or receivable at year end, and, in respect of each capital disposition for which they exceed or are estimated to exceed $1 million, the amount of the proceeds and a brief description.