Bill 96 — Third Session, 18Th Legislature, 26 Elizabeth Ii the Legislative Assembly of 'Alberta. Bill 96 the Trust Companies Amendment Act, 1977 (Legislature 18, Session 3)

L18 S3 5798

Alberta — Bills

1977 BILL 96 Third Session, 18th Legislature, 26 Elizabeth II THE LEGISLATIVE ASSEMBLY OF 'ALBERTA. BILL 96 THE TRUST COMPANIES AMENDMENT ACT, 1977 MR.GHITTER First Reading ........ _ .................................... . Second Reading .......................................... . Third Reading ........................................... . Printed by the Queen's Printer for the Province of Alberta, EDMONTON

Bill 96 Mr. Ghitter BILL 96 1977 THE TRUST COMP~NIES AMENDMENT ACT, 1977 (Assented to , 1977) HER MAJESTY, by and with the advice and consent of the Legislative Assembly of Alberta, enacts as follows: 1 The Trust Companies Act is amended by this Act. 2

Section 2(

J) is amended (

a) in clause 20) by adding "or 0.1)" after "subsection (1)", (

b) in clause 16 by adding "or" at the end of subclause Ov) and by adding the follOWing: (

v) that is restricted by law in its use to commer cial, industrial or residential purposes by zoning or otherwise~ (

c) by repealing clause 23, and (

d) by repealing clause 30 and by substituting thefollowing: 30 "unauthorized investment or loan" means an in vestment or loan of a company's own funds or its deposits and investment moneys that is not authorized by, or is expressly prohibited by, this Act or the regula tions or is made in contravention of any limitations or conditions prescribed by this Act or the regulations; 1

Explanatory Notes 1 This Bill will amend

chapter 372 of the Revised Statutes of Alberta 1970. A considerable number of the provisions of this Bill are to come into force on proclamation as regulations will be necessary before they can be effective. For an enumeration of these provisions, see the last

section of this Bill. 2

Section 2 (1), clauses 2, 16, 23 and 30 now read: 2. "ancillary corporation" means (

i) a corporation referred to in

section 112, subsection (1) and con trolled by a provincial company in accordance with that subsection, or (ij) a corporation whose assets have been purchased by a provincial company in accordance with

section 112.1; 16. "improved real estate" means real estate (

j) upon which there exists a building used or capable of being used for residential, commercial, industrial, educational, religious, charitable or recreational purposes, or (ij) upon which such a building is being constructed, or (iij) which is provided with the utilities necessary to serve such a building with electric power, water and sewers but only when the land is being mortgaged for the purpose of financing the construction of sllch a building, or (iv) on which actual farming or ranching operations are being conducted; 23. "real estate subsidiary" means a cO/poration referred to in

section 113, subsection 0); 1

Section 8(2) is amended by adding "$5000 has been paid in" after "not less than" and by repealing clauses (a), (

b) and (c). 4

Section 15(2) is amended by adding "at its head office" after "kept by the company". 5

Section 30(2) is repealed and the folio wing is substituted:

(2) A person is not eligible to be a director unless he holds fully paid common shares of the company, as the absolute and sole owner thereof in his individual right and not as trustee or in the right of another, in respect of which not less than $5000 (

a) has been paid in or credited by the company as capital, or (

b) was paid as the purchase price for the shares. 6

Section 650) (

a) and (

b) and (3) is amended by striking out "or a real estate subsidiary of the company". 2

30. "unauthorized investment or loan" means an investment or loan of a company's own funds or its deposits and investment moneys that is not authorized by or is express(y prohibited by this Act or is made i~ contravention of any limitations prescribed by this Act; As to the amendment to clause 2 (

j) and the repeal of clause 23, see the amendments to sections 112 and 113 of the Act in this Bill. As to the amendment to the definition of "improved real estate", see also the amendment in this Bill to

section 114. The definition of "unauthorized investment or loan is recast to reflect amendments in this Bill that will allow limitations and conditions on investments and loans to be prescribed by regulation. 3

Section 8(2) now reads:

(2) Notwithstanding anything in a company's special Act, a person is not eligible to act as a provisional director unless he is a subscriber for stock of the company for and on his own behalf: so as to become the absolute and sale owner in his individual right of such stock and not as trustee or in the right of another, on which subscription not less than (a) $3,000 have been paid in, where the paid in capital stock o.lthe company is $1,000,000 or less, or (b) $4,000 have been paid in, where the paid in capital stock of the company is over $1,000,000 and does not exceed $3.000.000, or (c) $5,000 have been paid in. where the paid in capital stock o.l the company exceeds $3. 000. 000. 4

Section 15 (2) now reads:

(2) The by-law shall be forthWith recorded in a book to be kept by the company for that purpose and to be known as the' 'by-law book' '. 5

Section 30(2) now reads:

(2) A person is not eligible to be a director unless he holds common shares of the company. as the absolute and sale owner thereo.l in his individual right and not as trustee or in the right o.l another, in respect of which not less than (a) $3,000, or such greater amount as the by-laws require, have been paid in or credited by the company as capital. when the paid in capital stock 0/ the company is $1,000,000 or less, or (b) $4,000, or such greater amount as the by-laws require, have been paid in or credited by the company as capital, when the paid in capital stock of the company is over $1,000, 000 and does not exceed $3,000, OUU, or (c) $5, 000, or such greater amount as the by-laws require, have been pai~ in or credited by the company as capital, when the paid in capital stock 0/ the company is 0 ver $3,000.

OOU. 6 Consequential to the amendments in this Bill to sections 112 and 113 of the Act. 2

SectIOn l'ff;r -) is repealed and IheJollo,,'/Ilg I~ :mb~llllIled:

(7) The remuneration of the auditors of the company appointed at an annual meeting of the company shaH be fixed by the shareholders at that meeting or by the directors jf they are authorized to do so, but the remuneration of auditors appointed under subsection (6) shaH be fixed by the directors. H

Section 9H.IO)(

c) is amended by striking out "or real estate" and by substituting", real estate or leasehold estate". Cj

SectIOn IOHO) IS amended (

a) by adding the following clause after clause (a): (a. I ) "regulated financial institution" means (

i) a trust company incorporated in Canada, (ii) a chartered bank, (iii) a treasury branch, (iv) an insurance company incorporated in Canada, (

v) a credit union incorporated in Canada, or (vi) any other corporation approved by the Director; (

b) in clause (

b) by striking out "sections 112 and 113" and by substlluting "section 112". I 0

Section 110(

a) is repealed. II (

I) Section III (

I) is amended (

a) in clause (

a) by repealing subclauses (;) and (;;) and substi tuting the .following: 3

.,.

Section 89(6) and (7) now read: If)) Where the company's auditors resign or are removed pursuant to subsection /5). the directors shall, by a majority vote, appoint as the company's auditors another. firm of chartered accountants acceptable to the Director . . -) The remuneration of the auditors shall be fixed by the company in general meeting, except that the remuneration of any auditors appointed by the directors may be.fixed by the directors. 8 Corrects a drafting omission. 9 "Regulated financial institution" is defined for the purposes of s~-:-tions 116 and 125 and the proposed

section 128.1. The amendment to clause (

b) is made as a consequence of the amendments in this Bill to sections 112 and 113 of the Act. 10

Section 110 now reads: 110 Where a company makes or has made a loan authorized by this Division. it may take personal proper(v as security for the loan if (

a) the loan is made pursuant to

section Ill. subsection (3). or (

b) the personal proper(v is in addition to the other security required by this Division in respect of the loan. Clause (

a) is repealed as a consequence of the repeal of

section 111(3) of the Act by this Bill. 11

Section III now reads in part: 1110) A provincial company may invest or loan the company's own funds and its deposits and investment moneys in. or on the securi(v of 3

(

i) issued or guaranteed as to principal and interest by the Government of Canada, the government of a province of Canada, the Government of the Uni ted States of America or the government of any state of the United States of America, or (ii) issued or guaranteed as to principal and interest by a municipal corporation in Canada or the United States of America, or (

b) in clause (

a) by repealing subclauses (

v) and (vi) and substi tuting the following: (

v) issued by a corporation incorporated in Canada if the bonds, debentures, notes or other evidences of indebtedness are fully secured by a first mort gage to the company or to a trustee upon any of, or any combination of, the following assets: (

A) improved real estate or leaseholds, (

B) plant or equipment of the corporation that is used in the transaction of its business, or (

C) bonds, debentures, notes or other evi dences of indebtedness or preferred or com mon shares authorized as investments under this section, but the inclusion as additional security in the mort gage of assets not of a class authorized by this Division as investments for a provincial company does not render the investment or loan an unau thorized investment or loan, or (vi) issued or guaranteed by a corporation incorpo rated in Canada or in the United States of America if at the date of the investment or loan the pre ferred shares or common shares of that corporation are authorized investments under clause (

g) or (h), or (

c) by repealing clause (b), (

d) by repealing clause (d) 0), and (

e) in clause (

g) by adding "or the United States of Ameri ca" after "incorporated in Canada".

(2) Section 111 (

J) is repealed. 4

(

a) bonds. debentures, notes or other el'idences of indebtedness (;) issued or guaranteed as to payment of principal and illferest by the Government o/Canada or the governmellf of any prol'ince o/Canada, or (i;) issued or guaranteed as to payment o/principal and illferest by any municipal corporation in any province 0/ Canada or the Gm'ernment of the United States o/America. or (

v) issued by a corporation incorporated in Canada i/ the bonds, debentures. notes or other evidences 0/ indebtedness are lulll' secured bl' a first mortgage to a trustee upon any. or any combin~tion oj; the following assets: or (

A) improved real estate. or (

B) the plant or equipment that is used in carrying on its business, or (

C) bonds. debentures. notes or other eVidences ol indebtedness or preferred or common shares authorized as inv~stments by this section, (v;) issued by a corporation incorporated in Canada il at the date 0/ the investment or loan the preferred shares or common shares Ql that corporation are authorized investments under clause (~) or (h), or (

b) bonds, debentures or preferred shares issued by a corporation incorporat ed in the United States 0/ America and that are convertible to common shares of the corporation, il at the time 0/ the investment or loan the common shares of that corporation are authorized investments under clause (h), (

d) investment certificates issued by another registered trust company i/ (;) that other company is an approved corporation under The Trustee Act, and (;;) at the date of the investment or loan the preferred shares or common shares 0/ that other company would, in the absence 0/

section I J J, clause (a). be an authorized investment under clause (

g) or (h). (

g) preferred shares Qf a corporation incorporated in Canada if (;) the corporation has paid a dividend upon any class Qf its preferred shares in each of the .five years immediately preceding the date 0/ the investment or loan at least equal to the speCified annual rate for that class. or (i;) the common shares of the corporation are. at the date of the investment or loan. authorized investments under clause (h). (

J) A company may loan the company's own funds and its depOSits and invest ment moneys without the taking by the company of security otherwise required by this Division but (

a) loans under this subsection shall not exceed in the aggregate an amount equal to 7 per cent of the company's own funds and its depOSits and investment moneys or such lesser amount as the Director may prescribe jor the company, and 4

Section 112 is amended (

a) in subsection (

j) by adding "or in the United States of America" after "incorporated in Canada", and (

b) in subsection (

j) by striking out "and" at the end 0/ clause (a), by adding "and" at the end 0/ clause (

b) and by adding the /ollowing clause: (

c) in the case of acquisition of shares of a corporation incorporated in the United States of America, none of the company's deposits and investment moneys is used to make the acquistion. (

c) by adding the/olio wing after subsection (j): (I.1) A provincial company may arrange for the incor poration in Canada or the United States of America of a corporation if (

a) the approval of the Minister is first obtained, (

b) the corporation is incorporated for the purpose of carrying on a business activity reasonably ancil lary to the business of a trust company, (

c) at the time of incorporation and at all times thereafter is the registered and beneficial owner of equity shares of the corporation carrying more than 50% of the voting rights attached to all equity shares of the corporation for the time being out standing, and (

d) in the case of a corporation incorporated in the United States of America, none of the company's deposits and investment moneys is used in connec tion with the incorporation or the acquisition of any shares of the corporation. (

d) in subsection (2) by adding "or (1.1)" after "subsection (1)". 13

Section 112.1 is amended (

a) in subsection (JJ by adding "or the United States of America" after "incorporated in Canada", 5

(

b) the outstanding amount of loans under this subsection to anyone person shall not at any time exceed the amount prescribed by the Director for the company.

Section 111(3) will be replaced by the new

section 128.2. 12

Section 112(1) and (2) now reads: 112(

J) A company may acquire. in accordance with this section. fully paid common shares Qf any corporation incorporated in Canada to carryon a business activity reasonably ancillary to the business Qfa trust company if (

a) the approval of the Minister is .first obtained. and (

b) the company is. upon making the acquisition. and all times thereafter. the registered and bene.ficial owner of equity shares of the corporation carrying more than 50 per cent of the voting rights attached to all equity shares Qf the corporation for the time being outstanding.

(2) Where the Minister gives his approval under subsection (J). the approval may be made subject to any terms and conditions prescribed from time to time by the Lieutenant Governor in Council. The proposed subsection (I. 1) will replace

section 113 (

I) and (2) which are to be repealed by

section 12 of this Bill. 13

Section 112.1 (1) now reads: 11 2.1 (

J) NotWithstanding anything in this Act. a prol'incial company may acquire the assets of a corporation incorporated in Canada to carryon a business actll'l(1' reasonably ancillary to the business of a trust company. upon the assumptIOn of the obligations and liabilities of that corporation. but no agreement therefor takes effect until it has been approved by the Minister. 5

(

b) by adding the/olio wing subsection:

(4) A provincial company shall not use any of its depos its and investment moneys to acquire the assets of a corporation incorporated in the United States of Ameri ca pursuant to subsection (1) or to defray any expenses in connection with such an acquisition. 14(

i) Section 113 is amended (

a) by repealintJ subsections (J), (2), (5), (6), (7) and (8), (

b) in subsection (3) by strikin .. out "its real estate subsidi ary" and substituting "an ancillary corporation of the company" , (

c) in subsection (3) (a), (

d) and (

e) by striking out ""real estate subsidiary" and by substituting ""ancillary corporation", (

d) by repealing subsection (3) (

c) and substituting the/ollowing: (

c) the amount of the indebtedness under the mortgage does not exceed any limitation prescribed by the regulations, (

e) by adding the/ollowing after subsection (3):

(3.1) A provincial company may, with the company's own funds or its deposits and investment moneys, make a loan to its ancillary corporation other than a mortgage loan under subsection (3), if it is authorized to do so by the regulations and then only in accordance with any conditions prescribed by the regulations with respect to loans under this spl)section. (

f) in subsection (4) by striking out ""subsidiary" and substitut ing "'ancillary corporation", and (

g) in subsection (4) by adding "or loan" after ""mortgage".

(2) A real estate subsidiary 0/ a provincial company incorporated pursuant to

section 113(J) 0/ The Trust Companies Act prior to the commencement 0/ this subsection shall be deemed to be an ancillary corporation 0/ the company incorporated pursuant to

section 112(J. J) 0/ that Act, as enacted by

section 12(c) 0/ this Act, and shall be deemed to have been incorporated with the consent 0/ the Minister 0/ Consumer and Corporate Affairs. 6

Section 113 now reads: 113(

J) A provincial company may arrange for the incorporation in Alberta or elsewhere in Canada of a corporation if (

a) at the time of incorporation and at all times thereajfer the company is the registered and bene/icial owner of equity shares of the corporation carrying more than 50 per cent of the voting rights attached to all equity shares of the corporation for the time being outstanding, and (

b) the corporation is incorporated primarily jar the purpose of this

section and with objects incidental to such purposes.

(2) Where a real estate subsidimy is incorporated, the company shall notify the Director of that fact within 10 days ajfer the date of incorporation, and shall furnish him with a true copy of its instrument of incorporation and its memoran dum of association and articles of association or any similar instruments or rules for the regulation of the affairs of the SUbsidiary.

(3) A provincial company may, with the company's own funds or its deposits and investment moneys, make a loan to its real estate subsidiary on the security of a .first mortgage executed in favour of the company pursuant to

section 114, subsec tion (

J) if (

a) the real estate subsidiary is the sole owner of the improved real estate so mortgaged at all times during the term of the mortgage, 6

Section 114 is amended (

a) in subsection (2) (

b) by striking out "the leasehold estate is of improved real estate" and by substituting "the real estate from which the leasehold estate is derived is improved real estate" , (

b) by adding the/allowing after subsection (3):

(4) Notwithstanding subsections 0) and (2), a provin cial company shall not make a loan under either of those subsections if the real estate concerned is improved real 7

(

b) the mortgage is otherwise not prohibited under this Division. (

c) the amount of the indebtedness under the mortgage does not exceed an amount equal to 2 per cent of the aggregate of the company's own funds and the company's deposits and investment moneys. (

d) at the time Ql execution of the mortgage. the real estate subsidiar.y has entered into leases or agreements for leases of the improved real estate and such leases will provide net revenue su.fficient during the term of the mortgage to repay at least 85 per cent of the amount loaned by the company. and (

e) the company has. prior to the execution of the proposed mortgage. informed the Director of the mortgage and the company and the real estate subsidiary have complied with any terms and conditions prescribed by the Director in respect of the mortgage or the leases.

(4) Except with the consent of the Director. a provincial company shall not enter into any agreement or arrangement with its subsidiary other than a mortgage permitted by this

section or with respect to any matter incidental to that mortgage.

(5) A provincial company may have more than one subsidiaty under this

section but shall not enter into more than one mortgage with one sUbsidiar.y without the prior consent Ql the Director.

(6) Notwithstanding subsections (1) and (5). the Minister may by notice to a provincial company that has one or more real estate subsidiaries prohibit the company from arranging for the incorporation of any additional real estate subsidiaries except with the approval of the Minister and if the company thereafter arranges for the incorporation of a subsidiary in contravention of the notice. the shares of real estate subsidiary owned by the company aft? an unauthorized investment.

(7) The total amount of the moneys invested by the company in the shares of its real estate subsidiaries and loaned under mortgages in favour of its real estate subsidiaries shall not exceed more than 10 per cent of the aggregate of the company's own funds and its depOSits and investment moneys.

(8) The Minister may with respect to any company increase the percentage limit referred to in subsection (7) in respect of all or any Ql the real estate subsidiaries of the company. Real estate subsidiaries will instead be incorporated pursuant to

section 112 (I.1) of the Act as proposed in

section 9 (

c) of this Bill. All references in the Act to real estate subsidiaries will be changed to ancillary corporations. 15

Section 114(2)(

b) now reads:

(2) A provincial company may. with the company's own funds and its deposits and investment moneys. invest in mortgages of leasehold estates or make loans under mortgages executed in favour of the company of leasehold estates if in each case (

b) the leasehold estate is of improved real estate in Alberta or elsewhere where the company is registered or licensed to carryon business as a trust company. 7

estate only by reason of

section 2 (1), clause 16 (

v) unless the company has first obtained from the borrow er an undertaking, made in accordance with the regula tions, that development of the real estate will com mence within the time prescribed by the regulations. 16

Section 116 is repealed and thefollowing is substituted: 116 A company may make an investment or loan under

section 114 or

section 115(2)(

a) or (

c) jointly with one or more regulated financial institutions. 17 Sections 118 to 122 are repealed and the following is substituted: 118 The powers of a provincial company to make invest ments and loans under sections 111 to 117 are subject to any limitations and conditions respecting the exercise of those powers prescribed by the regulations. 18

Section 123(2) is amended by striking out ", the shares of a mortgage investment corporation that are owned by the com pany or a real estate subsidiary of the company" and by substitut ing "or the shares of a mortgage investment corporation that are owned by the company". 19

Section 124 is amended by repealing subsections (J), (2), (3) and (6). 20

Section 125 is amended (

a) in subsection (

J) by striking out all that portion of the subsection preceding clause (

a) and by substituting the following: 125(1) Subject to subsections (3) and (4), a company may invest the company's own funds or its deposits and invest ment moneys in real estate for the production of income, either alone or jointly with one or more regulated financial institutions, (

b) in subsection (J), as amended by clause (

a) of this section, by striking out "subsections (3) and (4)" and by substituting "subsection (4) and the regulations", 8

An apparent contradiction occurs in subsection (2) (

b) because of the

definitions of "improved real estate" and "real estate" in

section 2 (

I) of the Act. This amendment is aimed at removing the contradiction. As to the proposed subsection (4) see the amendment to the definition of "improved real estate" being made by

section 2 of this Bill.

Section 114(1) and (2) deals with mortgage loans on the security of improved real estate and leasehold estates respectively. The undertaking referred to in the proposed subsection (4) is required where the land concerned is "improved real estate" only by being zoned for commercial, indus trial or residential use. See also the amendment in this Bill to

section 134 (1) of the Act which will allow the Director of Trust Companies to order the company to dispose of the loan if the undertaking is not complied with. 16

Section 116 now reads: 116 A company may make an investment or loan under

section 114 or

section 115, subsection (2), clause (

a) or (

c) jointly with any other registered trust company, a loan company or insurance company incorporated in Canada, subject to the approval of the Director and to any conditions prescribed by the Director. 17 Sections 118 to 122 and

section 124(1), (2), (3) and (6) contain particular limitations and restrictions on the powers of an Alberta trust company to make investments or loans in or upon the security of securities and mortgages. These limitations and restrictions will be dealt with in the regulations. See the amendments in this Bill to

section 145 of the Act. 18 Consequential to the amendments to

section 113 of the Act in this Bill. 19 See note to

section 17 of this Bill. 20

Section 125 (1) and (2) now read: 125(

J) Subject to subsections (3) and (4), a company may invest its own funds and its deposits and investment moneys in improved real estate for the production of income, either alone or jointly with any other registered trust company, a loan company incorporated in Canada and approved by the Director or an insurance company incorporated in Canada, (

a) if the real estate is situated in Alberta or elsewhere where the company is registered or licensed to carryon business as a trust company, (

b) if at the time of the investment the real estate is subject to a lease made to, or guaranteed by, (

i) a corporation the preferred or common shares of which are authorized jor investment under

section 111, or 8

(

c) in subsection (2) by striking out "Subject to subsections (3) and (4)" and by substituting "Subject to subsection (4) and the regulations", (

d) by striking out subsection (3). 21 The following headings and sections are added after

section 128: Personal Property Leasing 128.1 (

I) Subject to the regulations, a provincial company may, with the company's own funds and its deposits and investment moneys, either alone or jointly with one or more regulated financial institutions, invest in any personal prop erty for the purpose of leasing it if in the case of each lease, (

a) the lease is for a fixed term and cannot be ter minated or cancelled by the other party to the lease during its term, (

b) the rentals under the lease will provide a net revenue sufficient and (

i) to yield to the lessor a reasonable return during the term of the lease, and (ii) to enable the lessor to recover the purchase price of the personal property so leased, (

c) the lessee under the lease is a corporation any of whose securities are qualified as investments for a pro vincial company under

section 111 (1). 9

and (;

j) the Crown in right of Canada or the Crown in right of Alberta or any other province of Canada. or (;ij) a Crown corporation incorporated under

an Act of the Parliament o.l Canada.

an Act o.l the Legislature or an enactment o.lany province of Canada. (

c) il the lease provides for a net revenue su./ficient to yield a reasonable interest return during the unexpired term of the lease and to repay at least 85 per cent o.l the amount invested by the company in the real estate within the term o.l the lease. but not exceeding 30 years from the date of investment. and the company may hold. maintain. improve. sell or otherwise deal with or dispose of the real estate.

(2) Su~iect to subsections (3) and (4). a company may invest its own filnds and its deposits and investment moneys in improved real estate for the production of income where the real estate is situated in Alberta or elsewhere where the company is registered or licensed to carryon business as a trust company. and the company may hold. maintain. improve. sell or otherwise deal with or dispose o.l the real estate. Subsection (3) contains limitations on investments under subsections (

I) and (2). These limitations will be dealt with in the regulations. See the amendments in this Bill to

section 145 of the Act. 21 The proposed

section 128.1 will enable Alberta trust companies to engage in equipment leasing. The proposed

section 128.2 is a general investment and lending power or "basket clause". The investment powers under both sections are subject to limitations and conditions prescribed by regulation: see the amendments in this Bill to

section 145 of the Act. 9

(2) Where a lease entered into pursuant to subsection (1) is cancelled by the lessor by reason of the default of the lessee, a new lease may be entered into with respect to the same property and in that event (

a) subsection (1 )(

a) and (

c) apply to the new lease, and (

b) the rentals under the new lease shall provide a net revenue sufficient (

i) to yield to the lessor a reasonable return during the term of the lease, and (ii) to enable the lessor to recover the purchase price of the property so leased less any amounts recovered on account of the purchase price pur suant to the previous lease.

(3) Where a lease entered into under subsection (1) or (2) expires, the lease may be renewed or a new lease of the property entered into and in that event, subsection (1)(a) , (b)(

i) and (

c) apply to the new lease or the renewal of the lease.

(4) Property leased under this

section shall be sold at its fair market value when the lease is cancelled or expires and either the lease is not to be renewed or the property is not to be leased again. Residual Power Respecting Investments and Loans 128.2 Subject to the regulations, a provincial company may, with the company's own funds and its deposits and investment moneys, make investments and loans not other wise authorized by this Division. 22

Section 129 is amended (

a) by striking out subsection (4) and by substituting the following: (4) Subsection (1)(a) , (

b) and (

c) do not apply to a loan made by a company with the company's own funds to any of the persons referred to in those clauses or jointly to one of those persons and another or others, if (

a) the loan is approved by the board of directors or the executive committee of the board of direc tors of the company, 10

Section 129(I)(a), (b), (

c) and (4) now reads: 129(

J) Notwithstanding anything in this Division. a company shall not directly or indirectly with the company's own funds or its deposits and investment moneys make any loan to. or purchase any mortgage. loan. securities or real estate/rom. (

a) any director or qUicer of the company. or (

b) the spouse. child. parent. brother or sister of any director or qUicer of the company. or (

c) a person who is to the knowlege of the company the father-in-law. mother-in-law. son-in-law. daughter-in-law. brother-in-law or sister-in-law of any qUicer or director of the company. or 10

(

b) the amount of the loan does not exceed any limitation prescribed by the regulations, (

c) the loan does not contravene any conditions prescribed by the regulations, (

d) the loan is made on terms not more favourable to the borrower than to comparable borrowers of similar creditworthiness in the normal course of business, and (

e) in the case of a loan made pursuant to

section 114 or 115, the loan is made only to a person referred to in subsection (l)(a) , (

b) or (

c) or to that person and his spouse jointly and the loan relates to real estate used or to be used solely as the residence of the borrower or the borrower and his spouse. (

b) as to subsection (5) (

c) by striking out ", a mortgage investment corporation of which the company is a share holder or a real estate subsidiary of the company" and by substituting "or a mortgage investment corporation of which the company is a shareholder", (

c) by repealing subsection (6) and by substituting the/allowing:

(6) Subsection (l )(

a) to (

f) apply to a company in rela tion to an ancillary corporation of the company as though the words "the company" in those clauses read instead "an ancillary corporation of the company". 23

Section 130(J) (

a) is amended by striking out "or a real estate subsidiary of the company". 24

Section 132(2) is repealed and the/allowing is substituted:

(2) A person is not liable under subsection (l) (

a) if, being a director when the unauthorized invest ment or loan was approved and being present at the meeting of the board of directors or a committee thereof at the time when it was approved, he or (

i) forthwith at that meeting entered on the minutes of that meeting his protest against the unauthorized investment, and (ii) notified the Director, in writing, of his protest within 8 days after the date of that meeting, 11

(4) Subsection 0), clause '

a) does not apply where the company makes a loan under

section 114 or 115 to an officer of the company who is not a director in respect of real estate used or to be used solely as the residence of that officer, but the exemption provided by this subsection is limited to one loan to anyone officer. The amendments to subsections (5) and (6) are made as a conse quence of the amendments in this Bill to sections 112 and 113 of the Act. 23 Consequential to the amendments in this Bill to sections 112 and 113 of the Act. 24

Section l32(2) now reads:

(2) A person is not liable under subsection OJ (

a) if, being a director when the unauthorized investment was approved and being present at the meeting of the board of directors or a committee thereof at the time when it was approved, he or (

i) protested the unauthorized investment or loan at that meeting orally or in writing, and (iiJ notified the Director in writing, of his protest within eight days after the date of that meeting, 11

(

b) if, being a director when the unauthorized invest ment or loan was approved but not being present at the meeting of the board of directors or a committee thereof at the time when it was approved, he (

i) being able to do so, filed with the company his protest against the unauthorized investment or loan within 24 hours after he became aware of it, and (ij) being able to do so, notified the Director, in writing, of that protest within 8 days after the date on which he filed his protest with the company. 25

Section 134(

J) is amended (

a) in clause (

c) by adding "or 112.1" after "section 112", and (

b) by adding the folloWing after clause (c): (c. 1 ) any mortgage in respect of which an undertaking was given under

section 114(4) if the undertaking has not been complied with, or 26

Section 136 is amended by adding the following subsection after subsection 0):

(3.1) This

section applies only where the loan is made in Alberta. 27

Section 139 is amended (

a) in subsection (9) by striking out "amalagamation" and by substituting "amalgamation", and (

b) in subsection (J3)(

a) by striking out "amlagamated" and by substituting "amalgamated". 28

Section 145 is amended (

a) by adding the folloWing clauses after clause (dJ): (d2) authorizing loans under

section 113(3.1) and pre scribing conditions with respect to the making of such loans~ (d3) prescribing limitations or conditions on the exer cise by a provincial company of any of its powers to make investments or loans under Division 7~ 12

(

b) it; being a director when the unauthorized investment or loan was approved but not being present at the meeting of the board of directors or a committee thereofat the time when it was approved. he OJ .filed his written protest against the unauthorized investment or loan with the company. and (iO notified the Director in writing. of that protest. within 30 days ajter the date on which he .first had notice that the unau thorized investment or loan was so approved or within 6U days a./ter the date when the unauthorized investment or loan was so approved. whichever is the sooner. 25

Section 134(l)(

c) now reads: 134

(1) The Director may by order direct a company to dispose of (

c) any common shares of an ancillary corporation of the company in respect of which there has been a contravention of any terms or conditions prescribed by the Lieutenant Governor in Council pursuant to

section Ill. or As to the proposed clause (c. 1 ) see the amendment in this Bill to

section 114 of the Act and the explanatory note opposite. 26

Section 136 requires the submission of a loan statement to a borrower where there is a bonus or discount in favour of the trust company. The amendment will make it clear that, as regards Alberta incorporated trust companies, the requirement applies only in Alberta. 27 Corrects typographical errors. 28

Section 145 enumerates regulation-making powers of the Lieu tenant Governor in Council for the purposes of

Part 1 of the Act. As to the proposed clauses (d2),(d3),(d4) and (d5), see the amend ments in this Bill relating to sections 113, 118 to 122, 124, 125 and 129(4) and the proposed sections 128.1 and 128.2. The amendments to clause (

g) are consequential to the amendments in this Bill to sections 112 and 113 of the Act. 12

(d4) prescribing limitations or conditions for the pur poses of

section 129(4)~ (d5) authorizing the Minister or the Director to increase or decrease any limitations prescribed pursuant to clause (d3) or (d4) either generally or in particular circumstances or with respect to a particular company; (

b) in clause (g) (

i) by striking out subsidiaries" , "and real estate (

c) in clause (

g) by striking out "or" at the end of subclause (iii) and by repealing subclauses (iii) and (iv). 29

Section 165 is amended (

a) in clause (

a) by striking out "and each real estate subsidi ary of the company" and by substituting "or subsidiary", (

b) in clause (

b) by striking out "expense" and by substitut ing "expenses", and (

c) in clause (

b) by striking out "or real estate subsidiaries". 30

Section 192(2) is amended by striking out "register of trust companies" and by substituting "Trust Companies Register". 31 (

J) This Act, except the provisions enumerated in subsection (2), comes into force on the day upon which it is assented to.

(2) The following provisions of this Act come into force on a date or dates to be fixed by Proclamation:

section 2;

section 6;

section 10;

section 11(2);

section 12(

c) and (d);

section 14;

section 17;

section 18;

section 19; 13

29 Consequential to the amendments in this Bill to sections 112 and 113 of the Act. 30 The name of the register is corrected to its proper name under

section 146 of the Act. 13

section 20(b), (

c) and (d);

section 21;

section 22;

section 2J;

section 25(b);

section 28;

section 29. 14

14 Title: 1977 (18th, 3rd) Bill 96, The Trust Companies Amendment Act, 1977

Document details

Collection	Alberta — Bills
Citation	L18 S3 5798
Type	bill
Volume / chapter	L18 S3 5798
Language	en
Format	json
Source	PROVINCIAL
Identifier	ef3654048c4ecc1086274ed1bb6318285bf673db

Source file is stored in the law ingest library (json).