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1998/99 Legislative Session: 3rd Session, 36th Parliament

THIRD READING

The following electronic version is for informational

purposes only.

The printed version remains the official version.

BILL 85 – 1999

COMPANY ACT

... continued ...

Part 8 – Proceedings

Division 1 – Court Proceedings

Complaints by shareholder

(1) For the purposes of this section,

"shareholder" has the same meaning as in

section 1 (1), and includes a

beneficial owner of a share in a company and any other person whom the court considers to

be an appropriate person to make an application under this section.

(2) A shareholder may apply to the court for an order under this

section on the ground

(

a) that the affairs of the company are being or have been

conducted, or the powers of the directors are being or have been exercised, in a manner

oppressive to one or more of the shareholders including the applicant, or

(

b) that some act of the company has been done or is threatened,

or that some resolution of the shareholders or of the shareholders holding shares of a

class or series of shares has been passed or is proposed, that is unfairly prejudicial to

the applicant or to the applicant and one or more of the shareholders.

(3) On an application under this section, the court may, with a

view to remedying or bringing to an end the matters complained of and if it is satisfied

that the application was brought by the shareholder in a timely manner, make any interim

or final order it considers appropriate, including an order

(

a) directing or prohibiting any act,

(

b) to regulate the conduct of the company's affairs in future,

(

c) appointing a receiver or receiver manager,

(

d) directing an issue or conversion or exchange of shares,

(

e) appointing directors in place of or in addition to all or any

of the directors then in office,

(

f) removing any director,

(

g) directing a company, subject to subsections (5) and (6), to

purchase some or all of the shares of a shareholder and, if required, to reduce its

capital in the manner specified by the court,

(

h) directing a shareholder to purchase some or all of the shares

of any other shareholder,

(

i) directing a company, subject to subsections (5) and (6), or

any other person, to pay to a shareholder any part of the money paid by that shareholder

for shares of the company,

(

j) varying or setting aside a transaction to which a company is a

party and directing a party to the transaction to compensate the company or any other

party to the transaction,

(

k) varying or setting aside a resolution,

(

l) requiring a company, within a time specified by the court, to

produce to the court or to an interested person, financial statements in the form required

section 217 or an accounting in any form the court may determine,

(

m) directing a company, subject to subsections (5) and (6), to

compensate an aggrieved person,

(

n) directing rectification of the registers or other records of a

company,

(

o) directing that the company be liquidated and dissolved, and

appointing one or more liquidators, with or without security,

(

p) directing that an investigation be made under Division 3 of

this Part,

(

q) requiring the trial of any issue, or

(

r) authorizing or directing that legal proceedings be commenced

in the name of the company against any person on the terms the court directs.

(4) A company in respect of which an order is made under

subsection (3) must deposit a copy of the entered order in its records office within 14

days after the date of the entry of the order in the court registry.

(5) A company must pay to a person the full amount payable under

subsection (3) (g), (

i) or (

m) unless there are reasonable grounds for believing that the

company is, or the payment would render the company, insolvent.

(6) If reasonable grounds exist for believing that payment in full

of the amount referred to in subsection (5) would have the result set out in that

subsection,

(

a) the company is prohibited from paying the person the full

amount of money to which the person is entitled,

(

b) the company must pay to the person as much of the amount as is

possible without causing a circumstance set out in subsection (5) to occur, and

(

c) the company must pay the balance of the amount as soon as the

company is able to do so without causing a circumstance set out in subsection (5) to

occur.

Compliance or restraining orders

(1) In this section, "complainant"

means, in relation to a company referred to in subsection (2), a shareholder or any other

person whom the court considers to be an appropriate person to make an application under

this section.

(2) If a company or any director, officer, shareholder, employee,

agent, auditor, trustee, receiver, receiver manager or liquidator of a company contravenes

or is about to contravene a provision of this Act or the regulations or of the memorandum,

notice of articles or articles of the company, a complainant may, in addition to any other

rights that that person might have, apply to the court for an order that the person who

has contravened or is about to contravene the provision comply with or be restrained from

acting in breach of the provision.

(3) On an application under this section, the court may make any

order it considers appropriate, including an order

(

a) directing a person referred to in subsection (2) to comply

with or to refrain from contravening a provision referred to in that subsection,

(

b) enjoining the company from selling or otherwise disposing of

property, rights and interests, or from receiving property, rights and interests, or

(

c) requiring, in respect of a contract made contrary to

section

33, that compensation be paid to the company or to any other party to the contract.

Remedy of corporate mistakes

(1) In this section, "corporate mistake" means

an omission, defect, error or irregularity that has occurred in the conduct of the

business or affairs of a company as a result of which

(

a) a breach of a provision of this Act, a former Companies Act

or the regulations of any of them has occurred,

(

b) there has been default in compliance with the memorandum,

notice of articles or articles of the company, or

(

c) proceedings at or in connection with any of the following have

been rendered ineffective:

(

i) a general meeting;

(ii) a class meeting;

(iii) a series meeting;

(iv) a meeting of the directors, or of a committee of directors,

of the company;

(

v) any assembly purporting to be a meeting referred to in

subparagraph (i), (ii), (iii) or (iv);

(vi) a resolution in writing not passed at a meeting or assembly

referred to in subparagraph (i), (ii), (iii), (iv) or (v).

(2) Despite any other provision of this Act, the court, either on

its own motion or on the application of any interested person, may make an order to

rectify or cause to be rectified, to negative or to modify or cause to be modified the

consequences in law of a corporate mistake or to validate any act, matter or thing

rendered or alleged to have been rendered invalid by or as a result of the corporate

mistake, and may give ancillary or consequential directions it considers necessary.

(3) The court must, before making an order under this section,

consider the effect that the order might have on the company and on its directors,

officers, creditors, shareholders and beneficial owners of its shares.

(4) Unless the court orders otherwise, an order made under

subsection (2) does not prejudice the rights of any third party who acquired those rights

(

a) for valuable consideration, and

(

b) without notice of the corporate mistake cured by the order.

Applications to court to rectify records

(1) In this section, "basic records"

means, in relation to a company,

(

a) its articles,

(

b) its notice of articles or memorandum, as the case may be,

(

c) the minutes of its general meetings, class meetings and series

meetings,

(

d) if not included in the records referred to in paragraph (c),

any resolutions, including consent resolutions, passed by the shareholders or by

shareholders holding shares of a class or series of shares,

(

e) its register of directors maintained under

section 149, and

(

f) any of its securities registers maintained under

section 111.

(2) If information, other than information in respect of which a

court application may be made under

section 152, is alleged to be or to have been wrongly

entered or retained in, or wrongly deleted or omitted from, a company's basic records, the

company, a shareholder of the company or any aggrieved person may apply to the court for

an order that the basic records be rectified.

(3) In connection with an application under this section, the

court may make any order it considers appropriate, including,

(

a) an order requiring one or more of the basic records of the

company to be rectified,

(

b) an order restraining the company from calling or holding a

meeting of shareholders or paying a dividend before the rectification,

(

c) an order determining the right of a party to the application

to have his or her name entered or retained in, or deleted or omitted from, basic records

of the company, whether or not the issue arises between 2 or more shareholders or alleged

shareholders, or between the company and any shareholders or alleged shareholders, and

(

d) an order compensating a party who has incurred a loss as a

result of a matter referred to in subsection (2).

Enforcement of duty to file records

(1) If a company or an extraprovincial company or its

receiver, receiver manager or liquidator has failed to file with the registrar any record

required to be filed with the registrar under this Act, any director, any person who holds

a position equivalent to that of a director, any shareholder or any creditor of the

company or of the extraprovincial company may serve the person required to make the filing

with notice requiring that person to file the record with the registrar.

(2) If the person required to file a record with the registrar

under subsection (1) fails to file the record with the registrar within 14 days after

receipt of the notice referred to in subsection (1), the court may, on application by any

director, shareholder or creditor,

(

a) order the person to file the record with the registrar within

the time the court directs, and

(

b) direct that the costs of and incidental to the application be

paid by the company or extraprovincial company, by any director or officer of the company

or extraprovincial company, or by any other person the court considers appropriate.

(3) Neither the making of an order by the court under this

section

nor compliance with such an order relieves a person from any other liability.

Derivative actions

(1) In this

section and

section 251,

"complainant" means, in relation to a company, a

shareholder or director of the company;

"shareholder" includes a beneficial owner of a

share of the company and any other person whom the court considers to be an appropriate

person.

(2) A complainant may, with leave of the court, prosecute a legal

proceeding in the name and on behalf of a company

(

a) to enforce a right, duty or obligation owed to the company

that could be enforced by the company itself, or

(

b) to obtain damages for any breach of a right, duty or

obligation referred to in paragraph (a).

(3) Subsection (2) applies whether the right, duty or obligation

arises under this Act or otherwise.

(4) With leave of the court, a complainant may, in the name and on

behalf of a company, defend a legal proceeding brought against the company.

Powers of court in relation to derivative

actions

(1) The court may grant leave under

section 250 (2) or

(4), on terms it considers appropriate, if

(

a) the complainant has made reasonable efforts to cause the

directors of the company to commence or diligently prosecute or defend the legal

proceeding,

(

b) notice of the application for leave has been given to the

company and to any other person the court may order,

(

c) the complainant is acting in good faith, and

(

d) it appears to the court that it is in the best interests of

the company for the legal proceeding to be brought or defended.

(2) Nothing in this

section prevents a court from making an order

that the complainant give security for costs.

(3) While a legal proceeding prosecuted or defended under this

section is pending, the court may,

(

a) on application of the complainant, authorize any person to

control the conduct of the legal proceeding or give any other directions for the conduct

of the legal proceeding, and

(

b) on the application of the person controlling the conduct of

appropriate, that the company pay to the person controlling the conduct of the legal

proceeding interim costs in the amount and for the matters, including legal fees and

disbursements, that the court considers appropriate.

(4) The court may, on the final disposition of a legal proceeding

prosecuted or defended under this section, order that a person to whom costs are paid

under subsection (3) (

b) repay to the company some or all of those costs.

(5) On the final disposition of a legal proceeding prosecuted or

defended under this section, the court may make any order it considers appropriate,

including an order that

(

a) the company or any other party to the legal proceeding

indemnify

(

i) the complainant, for the costs incurred by the complainant in

prosecuting or defending the legal proceeding, or

(ii) the person controlling the conduct of the legal proceeding,

for the costs incurred by the person in controlling the conduct of the legal proceeding,

(

b) the complainant or the person controlling the conduct of the

legal proceeding indemnify one or more of the company, a director of the company and an

officer of the company for expenses, including legal costs, that they incurred as a result

of the legal proceeding.

(6) No legal proceeding prosecuted or defended under this

section

may be discontinued, settled or dismissed without the approval of the court.

(7) No application made or legal proceeding prosecuted or defended

under

section 250 or this

section may be stayed or dismissed merely because it is shown

that an alleged breach of a right, duty or obligation owed to the company has been or

might be approved by the shareholders of the company but evidence of that approval or

possible approval may be taken into account by the court in making an order under this

section.

Relief in legal proceedings

252 If, in a legal proceeding against a director, officer,

receiver, receiver manager or liquidator of a company, the court finds that that person is

or may be liable in respect of negligence, default, breach of duty or breach of trust, the

court must take into consideration all of the circumstances of the case, including those

circumstances connected with the person's election or appointment, and may relieve the

person, either wholly or partly, from liability, on the terms the court considers

necessary, if it appears to the court that, despite the finding of liability, the person

has acted honestly and reasonably and ought fairly to be excused.

Applications to court under this Act

(1) Subject to subsection (2), an application to the

court under this Act may be brought without notice unless notice is specifically required

under subsection (2) or otherwise under this Act.

(2) The court may direct that notice of any application under this

Act be served on those persons the court requires.

Court may order security for costs

254 If a corporation is the plaintiff in a legal proceeding

brought before the court, and if it appears that the corporation will be unable to pay the

costs of the defendant if the defendant is successful in the defence, the court may

require security to be given by the corporation for those costs, and may stay all legal

proceedings until the security is given.

Registrar's certificates not revocable

255 Nothing in this Act confers on the court power to

revoke any certificate issued by the registrar under this Act or any former Companies

Act.

Division 2 – Dissent Proceedings

Definitions and application

(1) In this Division:

"dissenter" means a person who, being entitled to

do so, gives written notice of dissent when and as required by

section 262;

"dissenter's shares" means all of the shares in

respect of which a dissenter must dissent under

section 257 (2), and "dissenters'

shares" has a corresponding meaning in relation to the dissenters to whom it

refers;

"payout value" means

(

a) the fair value of a dissenter's shares immediately before the

date of the resolution authorizing or effecting the corporate action in respect of which

the dissenter dissented, excluding any appreciation or depreciation in anticipation of the

corporate action unless exclusion would be inequitable, or

(

b) in the case of a dissent under

section 305 (2) (c), the fair

value of a dissenter's shares immediately before the passing of the resolution adopting

the arrangement, excluding any appreciation or depreciation in anticipation of the

corporate action unless exclusion would be inequitable.

(2) Unless the court orders otherwise, this Division applies to

any right of dissent exercisable by a shareholder under

(

a) this Act,

(

b) a directors' or shareholders' resolution, or

(

c) a court order.

Right to dissent

(1) A shareholder of a company is entitled to dissent

as follows:

(

a) under

section 65 (2), in respect of a resolution to authorize

an alteration to the articles to relieve the company's directors from the obligation

imposed on them by

section 65 (1);

(

b) under

section 278, in respect of a resolution that would have

the effect of altering restrictions on the powers of the company or on the business it is

permitted to carry on;

(

c) under

section 290, in respect of a resolution to adopt an

amalgamation agreement;

(

d) under

section 301, in respect of a resolution to approve an

amalgamation under Division 4 of

Part 9;

(

e) in accordance with any court order made under

section 305 (2)

(

c) permitting dissent;

(

f) under

section 314 (5), in respect of a resolution to sell,

lease or otherwise dispose of all or substantially all of the company's undertaking;

(

g) under

section 320 (2), in respect of a resolution to continue

the company into a jurisdiction other than British Columbia;

(

h) in respect of any other resolution, if dissent is authorized

by the resolution, or in accordance with any other court order permitting dissent.

(2) A shareholder who wishes to exercise a right of dissent must

dissent in respect of

(

a) all of the shares of the company beneficially owned by the

shareholder, whether or not recorded in the shareholder's name, and

(

b) subject to subsection (3), all of the shares recorded in the

shareholder's name.

(3) A shareholder who is recorded as the owner of shares that are

beneficially owned by one or more other persons may dissent with respect to fewer than all

of the shares recorded in that shareholder's name if

(

a) the shareholder dissents with respect to all of the shares

beneficially owned by each beneficial owner on whose behalf dissent is made,

(

b) the shareholder notifies the company, in writing, of the name

and address of each beneficial owner on whose behalf the shareholder is dissenting, and

(

c) the shareholder provides to the company a written statement,

signed by the beneficial owner on whose behalf the shareholder is dissenting, that

(

i) the shares with respect to which the shareholder is dissenting

constitute all of the shares of the company that are owned, directly or indirectly, by the

beneficial owner, or

(ii) the dissent is being exercised with respect to all of the

shares of the company that are owned, directly or indirectly, by the beneficial owner and

setting out the name of each shareholder in whose name any of those shares is recorded,

and the number, and the class and series, if applicable, of those shares that are recorded

in the name of each of those shareholders.

Loss of right to dissent

(1) The right of a shareholder to dissent terminates

and this Division ceases to apply on the occurrence of any of the following events:

(

a) the corporate action in respect of which the shareholder

dissented is abandoned or the resolution authorizing the corporate action is revoked;

(

b) the amalgamation agreement, in respect of which a notice of

dissent was given under

section 290, is not adopted by one or more of the amalgamating

companies referred to in the agreement with the result that the agreement is terminated;

(

c) a court of competent jurisdiction permanently enjoins or sets

aside the corporate action in respect of which the shareholder dissented;

(

d) the shareholder consents to, or votes in favour of, the

resolution to which he or she is dissenting, unless the vote is given solely as a proxy

holder for a person whose proxy required an affirmative vote;

(

e) the notice of dissent given to the company under

section 262

is withdrawn

(

i) with the written consent of the company, or

(ii) under

section 265 (4) (b);

(

f) the shareholder, after giving notice of dissent, acts

inconsistently with that dissent;

(

g) the court determines that the shareholder is not entitled to

dissent under this Division.

(2) Despite subsection (1) (e) (

i) and (f), a dissenter who makes

a request to withdraw a notice of dissent retains the right to dissent under this Division

unless that request is accepted by the company or is made under

section 265 (4) (b).

Notice of resolution

(1) If a resolution that might give rise to the filing

of a notice of dissent is to be considered at a general meeting, a class meeting or a

series meeting, the company must send to each of its shareholders

(

a) a copy of the proposed resolution, and

(

b) a notice of the meeting that specifies the date of the

meeting, and contains a statement, in the prescribed form, advising shareholders of their

right to give and the consequences of giving a notice of dissent.

(2) Notice under subsection (1) (

b) must be sent to the

shareholders at least 21 days before the date of the proposed meeting.

(3) Nothing in this

section gives a shareholder a right to attend

a meeting the shareholder would not otherwise be entitled to attend or to vote on a

resolution on which the shareholder would not otherwise be entitled to vote.

Notice of consent resolutions in certain

circumstances

(1) If a resolution that might give rise to the filing

of a notice of dissent is to be passed as a consent resolution of the shareholders, the

company may send to each of its shareholders

(

a) a copy of the proposed resolution, and

(

b) a notice that specifies the date on which the resolution is to

be passed, and contains a statement, in the prescribed form, advising shareholders of

their right to give and the consequences of giving a notice of dissent.

(2) Notice under subsection (1) (

b) must be sent to the

shareholders at least 21 days before the date on which the resolution is to be passed.

(3) Nothing in this

section gives a shareholder a right to vote on

a resolution on which the shareholder would not otherwise be entitled to vote.

(4) If a resolution that might give rise to the filing of a notice

of dissent is passed as a consent resolution of the shareholders without notice of that

resolution having been given in accordance with subsections (1) to (3), or is passed as a

directors' resolution, the company must, within 14 days after the date on which the

resolution was passed, send to each shareholder of the company who did not consent to the

resolution

(

a) a copy of the resolution, and

(

b) a statement, in the prescribed form, advising shareholders of

their right to give and the consequences of giving a notice of dissent.

Notice of court orders

261 If a court order provides for a right of dissent that

may be exercised by one or more shareholders, the company must, within 14 days after the

date on which the company receives a copy of the entered order, send to each shareholder

who is entitled to exercise that right of dissent and who has not received a notice under

section 259 or 260 respecting the matter in respect of which a notice of dissent may be

given

(

a) a copy of the entered order, and

(

b) a statement, in the prescribed form, advising shareholders of

their right to give and the consequences of giving a notice of dissent.

Notice of dissent

(1) Any shareholder may give a notice of dissent to the

company in respect of a resolution referred to in

section 259 or 260 or a court order

referred to in

section 261, whether or not that shareholder's shares carry the right to

vote.

(2) A shareholder who is entitled to exercise dissent rights in

respect of a resolution or court order may do so by giving to the company written notice

of dissent in respect of the resolution or order,

(

a) if the right to dissent is created by a resolution referred to

section 257 (1) (

h) or by a court order, on or before the date specified by the

resolution or order, as the case may be,

(

b) if the resolution referred to in paragraph (

a) does not

specify a date for the giving of notice of dissent or, if dissent is given in respect of a

resolution referred to in

section 257 (1) (a), (b), (c), (d), (

f) or (g), at least 2 days

before the date of the meeting at which the resolution, in respect of which the dissent is

exercised, is to be passed or, in the case of a consent resolution referred to in

section

260 (1), at least 2 days before the date on which the resolution is to be passed,

(

c) if the resolution is one referred to in

section 260 (4),

within 20 days after receiving the records referred to in

section 260 (4) (

a) and (b),

(

d) if the right to dissent arises out of a court order and the

court order does not specify a date for the giving of notice of dissent, within 20 days

after receiving the records referred to in

section 261,

(

e) if the shareholder does not receive the records required under

section 259 or 260, as the case may be, within 20 days after he or she learns that the

resolution has been adopted or consented to, or

(

f) if the shareholder does not receive the records required under

section 261, within 20 days after he or she learns that he or she is entitled to dissent.

(3) Within 30 days after sending a notice of dissent, the

dissenter must send to the company or its transfer agent the certificates issued by the

company representing the dissenter's shares and, after sending those certificates as

required by this subsection, the dissenter is, subject to

section 266, deemed to have sold

the dissenter's shares to the company and the company is deemed to have purchased those

shares.

(4) Despite

section 74, if the dissenter complies with subsection

(3) of this section, the company must make the purchase contemplated by subsection

(3) whether or not it is authorized to do so by, and despite any restriction in, its

memorandum or articles.

(5) Unless the court orders otherwise, if a dissenter fails to

comply with subsection (3), the right of the dissenter to dissent terminates and this

Division ceases to apply.

(6) A dissenter who has given a notice of dissent in accordance

with subsection (2)

(

a) may not vote, or exercise or assert any rights of a

shareholder, in respect of the dissenter's shares, other than under this Division, and

(

b) may, until the dissenter is paid in full for the dissenter's

shares or until this Division ceases to apply, exercise and assert all the rights of a

creditor of the company.

Company's response to dissent

263 A company that has authorized or effected a corporate

action by a resolution or under a court order in respect of which dissent was made must

promptly send to each dissenter

(

a) a written offer by which the company offers to pay to the

dissenter the amount estimated by the company to be the payout value of the dissenter's

shares, and

(

b) a written explanation, in sufficient detail to permit the

shareholder to form a reasoned judgment concerning the matter, as to how the company

estimated the payout value of the dissenter's shares.

Application to court

(1) If a dissenter to whom an offer is made under

section 263 accepts the offer, the company must, unless it is prohibited from doing so

under

section 265, pay the offered amount to the dissenter promptly after its receipt of

the dissenter's acceptance of the offer.

(2) Within 50 days after the action approved by the resolution is

effective or within such further period as the court may allow, a company may apply to the

court to set the payout value of the dissenters' shares if

(

a) the company fails to make an offer under

section 263, or

(

b) a dissenter fails to accept an offer made under that section.

(3) If subsection (2) (

a) or (

b) applies and the company fails to

apply to the court under that subsection, the dissenter may apply to the court to set the

payout value of the dissenters' shares.

(4) On an application under this section, the court may make any

order it considers appropriate and may, without limitation,

(

a) order that the payout value of the dissenter's shares be

established by arbitration,

(

b) grant judgment to a dissenter for the payout value of the

dissenter's shares, as determined by the court or by an arbitration ordered under

paragraph (a), as the case may be, plus any interest the court considers appropriate, and

(

c) join in the application any other dissenter who has not

accepted an offer under

section 263 and any other person the court considers appropriate.

(5) Subject to

section 265, if the court or an arbitrator

determines the amount that is to be paid by the company to a dissenter, the company must

promptly pay that amount to the dissenter.

Prohibition against payment by companies

(1) A company must pay to each dissenter the amount of

money to which the dissenter is entitled under

section 264 unless there are reasonable

grounds for believing that

(

a) the company is insolvent, or

(

b) making the payments due to all dissenters who, at the time

that the payment is due, have complied with this Division, in respect of the same

resolution or court order, would render the company insolvent.

(2) If reasonable grounds exist for believing that payment in full

of the aggregate amount of money referred to in subsection (1) would have the result set

out in that subsection,

(

a) the company is prohibited from paying the dissenters the full

amount of money to which they are entitled,

(

b) the company must pay to each dissenter to whom payment is

required under this Division as much of the money that is payable to that dissenter as is

possible without causing a circumstance set out in subsection (1) of this

section to occur

and that payment must be made rateably among all of those dissenters, and

(

c) the company remains obligated to pay the balance of the

required payments and must, as soon as the company is able to do so without causing a

circumstance set out in subsection (1) to occur, pay the balance along with interest on

the amount of that balance calculated

(

i) from the date on which the company becomes obligated to pay

that balance until the date on which the balance is paid, and

(ii) at the rate of interest that is used to calculate prejudgment

interest under the Court Order Interest Act.

(3) Within 10 days after determining that subsection (2) applies,

the company must

(

a) notify each dissenter that the company is unable lawfully to

pay dissenters the whole amount payable for the dissenters' shares, and

(

b) inform each dissenter of the rights of dissenters under this

section.

(4) If subsection (2) applies,

(

a) unless the notice of dissent is withdrawn under paragraph (

b) of this subsection, the dissenter retains a status as a claimant against the company, to

be paid as soon as the company is lawfully able to do so or, in liquidation, to be ranked

subordinate to the rights of creditors of the company but in priority to its shareholders,

(

b) the dissenter may, by written notice delivered to the company

within 30 days after receiving a notice under subsection (3), withdraw the notice of

dissent, and, if the dissenter withdraws the notice of dissent under this paragraph, the

company is deemed to consent to the withdrawal.

Shareholders entitled to return of shares and

rights

266 The company must return to a shareholder each of the

share certificates, if any, sent under

section 262 (3) or, if those share certificates are

unavailable, replacements for those share certificates, and the shareholder regains the

ability to exercise all of the rights and special rights or restrictions that were

attached to the shares represented by those share certificates if

(

a) this Division ceases to apply to the shareholder under

section

258 or under

section 262 (5), or

(

b) the shareholder withdraws the notice of dissent under

section

265 (4) (b).

Division 3 – Investigations

Appointment of inspector

(1) Subject to subsection (3), on an application

brought by one or more shareholders who, in the aggregate, hold at least 1/5 of the issued

shares of a company, the court may

(

a) appoint an inspector to conduct an investigation of the

company, and

(

b) determine the manner and extent of the investigation.

(2) An inspector appointed under this

section has the powers set

out in

section 270 and any additional powers provided by the order by which the inspector

is appointed.

(3) The court may make an order under subsections (1) and (2) if

it appears to the court that there are reasonable grounds for believing that

(

a) the business or affairs of the company 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 one or more of the applicants or any

other person,

(

b) the business of the company is or has been carried on with

intent to defraud any person,

(

c) the company was formed for a fraudulent or unlawful purpose or

is to be dissolved for a fraudulent or unlawful purpose, or

(

d) persons concerned with the formation, business or affairs of

the company have, in connection with it, acted fraudulently or dishonestly.

Conditions of appointments of inspectors

(1) The applicant for an order under

section 267 must

provide notice of the application to the company.

(2) If the court appoints an inspector under

section 267, the

inspector must promptly send to the company a copy of the entered order of appointment.

(3) The company must deposit in its records office the copy of the

entered order referred to in subsection (2) promptly after its receipt.

(4) The court may, before appointing an inspector under

section

267, require the applicants to give security for the payment of the costs and expenses of

the investigation and may, at any time,

(

a) set the amount of the costs and expenses, and

(

b) order by whom and in what proportion those costs and expenses

are to be paid.

Appointment of inspectors by companies

269 A company may, by a special resolution, appoint an

inspector to investigate the affairs and management of the company, and to report in the

manner and to the persons the resolution directs.

Powers of inspectors

(1) A person who is or was a director, receiver,

receiver manager, officer, employee, banker, auditor or agent of the company or any of its

affiliates must, on request of an inspector appointed under this Division,

(

a) produce, for the examination of the inspector, each accounting

record and each other record relating to the company or any of its affiliates that is in

the custody or control of that person, and

(

b) give to the inspector every assistance in connection with the

investigation that that person is reasonably able to give.

(2) The inspector may examine, on oath, any person who is or was a

director, receiver, receiver manager, officer, employee, banker, auditor or agent of the

company or any of its affiliates in relation to the affairs, management, accounts and

records of or relating to the company being investigated, and may administer the oath.

(3) A person giving evidence in an investigation under this

Division may be represented by a lawyer.

Immunities of inspectors during investigations

271 An oral or written statement or report made by an

inspector or any other person in an investigation under this Division has qualified

privilege.

Report of inspector

(1) An inspector appointed under

section 267 must, on

the conclusion of the investigation, make a report to the court and send a copy of that

report to

(

a) the company,

(

b) the executive director if

(

i) the inspector was appointed before the coming into force of

this Act and the company was, at the date of the appointment, a reporting company within

the meaning of the Companies Act, 1973 ,

(ii) the inspector was appointed after the coming into force of

this Act and the company was a reporting company within the meaning of the Companies

Act, 1973 on the earlier of

(

A) the third anniversary of the coming into force of this Act,

and

(

B) the date of the appointment, or

(iii) the company is a reporting issuer, and

(

c) any other person the court orders.

(2) An inspector appointed under

section 269 must, on the

conclusion of the investigation, report to the company in the manner directed by the

resolution under which the inspector was appointed.

(3) A company that receives a report under this

section must

deposit the report at its records office promptly after receipt.

Exemption from disclosure to inspectors

273 An inspector appointed under this Division must not

require a lawyer to disclose any privileged communication made to the lawyer in that

capacity, except as to the name and address of his or her clients.

Inspectors' reports as evidence in legal

proceedings

274 A copy of the report of an inspector appointed under

section 267 or 269, signed by the inspector, is admissible in any legal proceeding as

evidence of the opinion of the inspector.

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