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This Act has "Not in Force" sections. See the Table of Legislative Changes.

Credit Union Incorporation Act

[RSBC 1996] CHAPTER 82

Contents
Part 1 — Interpretation
1Definitions
2Repealed
2.1Credit union relationships
2.2Notice by mail
3-5Repealed
Part 2 — Incorporation and Significant Changes
Division 1 — Incorporation
6Application for incorporation
7Rules
8Registration documents
8.1Effect of incorporation
9Evidence of incorporation
9.1Effect of constitution and rules
10Conclusiveness of certificate
11Commission's consent to incorporation
12Capacity and powers of credit unions
12.1Restricted businesses and powers
12.2Application to restrain
13Preliminary activities
13.1Credit union without a member
14Name
14.1Reservation of name
14.2Name to be displayed
15Repealed
Division 2 — Significant Changes
15.1Transfer of incorporation to British Columbia
15.2Transfer of incorporation from British Columbia
15.3Effect of continuation
16Business acquisition by asset transfer
17Business acquisition directed by commission
18Vesting in the acquiring credit union
19Dissolution of transferring credit union
20Amalgamation
21Amalgamation directed by commission
22No interruption in business on amalgamation
23Vesting on amalgamation
24Right to redeem equity shares on business acquisition or amalgamation
Division 3
25-39Repealed
Part 2.1 — Winding Up
Division 1 — Voluntary Winding Up
25.1Voluntary winding up requires special resolution
25.2Solvency of credit union for voluntary winding up
25.3Notice must be given to commission
26.1Commencement of voluntary winding up
26.2Appointment of liquidator
26.3Remuneration of liquidator
Division 2 — Winding Up by Court Order
27.1Winding up by court order
27.2Commencement of winding up by court order
27.3Court must appoint liquidator
28.1Remuneration of liquidator
Division 3 — Winding Up by Commission
28.2Winding up directed by commission
28.3Remuneration of liquidator
29.1Winding up on direction of commission
Division 4 — Effect of Winding Up
29.2Effect of resolution or order for winding up
29.3Examination of credit union winding up
30.1Powers of Supreme Court
30.2Additional powers of Supreme Court
30.3Duty to assist liquidator
Division 5 — Liquidators
31.1Qualification of liquidator
31.2Validity of acts of liquidator
31.3Filing and publication of notice of appointment
32.1Meeting of creditors
32.2Creditor must commence action on claim
32.3Custody of property
33.1Liquidator to notify commission of offence
33.2Powers of liquidator
33.3Resignation and removal of liquidator
34.1Liquidator ceasing to act must file notice
34.2Filling vacancy in office of liquidator
Division 6 — Disposing of Assets of Credit Union
34.3Liquidator's powers of disposition
35.1Sale of credit union for shares or debentures
35.2Satisfaction of liabilities on winding up
35.3Distribution of surplus if credit union has not issued equity shares
36.1Distribution of surplus if credit union has issued equity shares
36.2Members' or auxiliary members' indebtedness to credit union
36.3Unclaimed or undistributed assets
Division 7 — Completion of Winding Up
37.1Final meeting and dissolution
38.1Dissolution on completion of winding up
39.1Notice on dissolution
39.2Disposal of books and papers of credit union
39.3Discharge by court order
Part 2.2 — Offices and Records
Division 1 — Credit Union Offices
39.4Registered and records offices
39.41Change of registered or records office
Division 2 — Records
39.42Records office documents
39.43Examination of records
39.44Copies
39.45Copy of constitution and rules for member
39.46Form of records
Division 3 — Accounting Records
39.47Accounting records required
Division 4 — Financial Statements
39.48Financial statements for members
39.49Approval for publication
Part 2.3 — Audits
Division 1 — Appointment of Auditor
39.5Auditor
39.51Qualifications
39.52Persons not qualified as auditors
39.53Remuneration
39.54Removal of auditor
39.55Notice of proposed change
Division 2 — Audit Committee
39.56Appointment and procedures
Division 3 — Duties and Rights of Auditors
39.57Annual audit
39.58Negative audit report
39.59Audited statements of subsidiaries
39.6Auditor's attendance
39.61Procedure
39.62Amendment of financial statements and report
39.63Access to information
39.64Information as to foreign subsidiaries
39.65Right to attend general meetings
39.66Qualified privilege
Part 2.4 — Alteration of Constitution and Rules
39.7Definition
39.71Commission's consent
39.72Powers to alter constitution
39.73Copies to include alterations
39.74Powers to alter rules
39.75Copies to include alterations
39.76Altering restrictions
39.77Procedure and effect
Part 3 — Membership, Shares and Voting
Division 1 — Membership
40Common bond
41Membership qualifications
42Junior members
43Ceasing to be a member
44Membership shares
45Membership ceases for failure to hold membership shares
46Auxiliary membership
47Withdrawal from membership
48Termination of membership
49Termination of membership by special resolution
50Readmission requires special resolution
51Restrictions respecting auxiliary membership
52Entitlement to refund
53Loss of office
54Register of members and auxiliary members
Division 2 — Shares
55Shares
55.1Kinds of shares
55.2Price or consideration for shares
55.3Shares to be fully paid
55.4Liability of directors
55.5Commissions and discounts
56Creation of special rights and restrictions
57Alteration or abrogation
58No interference with class rights without consent
59Dissenter's right to apply to Supreme Court
60Entitlement to share certificate
61Particulars of issue on share certificates
61.1Certificate as evidence of title
61.2Signature on certificate
61.3Lost or destroyed certificates
61.4Liability of equity shareholders
61.5Powers of personal representative
61.6Documents for transmission
61.7Effect of documents provided
62Security issue preconditions
63Disclosure to person acquiring securities
64Transfer, redemption and purchase of shares
65Dividends on shares
66Discharge of credit union
67Shares in trust
68Financial assistance for equity shares
69Patronage allocations
Division 3 — Voting and Meetings
70Voting
71Voting at a meeting
72Rules may allow vote in writing and by electronic means
73Voting choices for large credit union
74Annual general meeting
74.1Information for annual general meeting
75Meetings
75.1Minutes
76Special general meetings
77Members' special resolutions at other meetings
78Notice of general meeting
79Location of general meetings
80Special resolutions
Part 4 — Business
81Business outside British Columbia
82Insurance
82.1Form and effect of contracts
82.2Authentication of documents
82.3Liability of insiders
Part 4.1 — Debentures
82.4Interpretation
82.5Enforcement of contract to take debentures
82.6Validity of perpetual debenture
82.7Issue of redeemed debenture
Part 5 — Management
Division 1 — Directors
83Directors
84Director training
84.1Conditions of election or appointment of director
84.11Credit union to file returns as to directors
84.12Persons disqualified as directors
84.13Share qualification
84.14Register of directors
84.15Powers and functions of directors
84.16No exculpation
84.17Director to disclose interest
84.18Director liable to account
84.19Validity
84.2Disclosure of conflict of office or property
84.21Validity of acts of director
84.22Resolution of directors in writing
84.23Directors' liability
84.24Ceasing to hold office
84.25Vacancy and quorum
84.26Notice of cessation
Division 2 — Officers
84.3President and secretary
84.31Duty to comply
84.32Duty to disclose
84.33Duties of secretary
Part 5.1 — Court Proceedings
84.4Derivative action
84.41Relief
84.42Applications to court
84.43Service on credit union
Part 6 — Central Credit Unions
85Incorporation of central credit union
86Powers under other legislation
86.1Significant changes
87Canada Deposit Insurance Corporation
88Agent for bond sales
89Loans to members
90Other services
91Director's qualifications
92Rules
Part 7 — Hearings and Appeals
93Orders, consents and refusals to be in writing
94Power to impose conditions
95Hearing requirements
96Public hearing
97Witnesses at hearings
98Appeal
99Immunities
100Confidential information
Part 8 — Offences and Penalties
101Offences
102Penalties
103Remedies preserved
104Limitation period
105Court order to comply
106Innocent third parties
107Remedy of irregularities
107.1Enforcement of duty to make returns
Part 8.1 — Administration
Division 1 — Office of Registrar
107.2Repealed
107.3Certificate as conclusive evidence
Division 2 — Records Filed with Registrar
107.4Credit union to file annual report
Part 9 — Regulations and Transition
108Power to make regulations
Part 10 — Review of Act
109Review of Act

Part 1 — Interpretation

Definitions

1  (1) In this Act and the Company Act as it applies for the purposes of this Act:

"auditor" includes a partnership of auditors;

"auxiliary member" means a person who is an auxiliary member of a credit union under section 46;

"business authorization" means an authorization to carry on

(a) deposit business, or

(b) both deposit business and trust business,

issued or deemed to be issued under Division 1 of Part 3 of the Financial Institutions Act to a creditunion;

"capital base" has the same meaning for the purposes of this Act as it has under the Financial Institutions Act;

"central credit union" means a credit union in which membership is restricted to credit unions, other corporations, public bodies or the Crown in right of Canada or British Columbia or in any other right;

"charter" includes an Act, statute, ordinance, letters patent, certificate, declaration or other instrument or provision of law by or under which a corporation has been incorporated, amalgamated or continued, and also the corporation's memorandum, articles, constitution, rules, regulations or bylaws, agreement or deed of settlement;

"child" of a person includes the child of the person's spouse;

"class meeting" means a meeting of members or auxiliary members who hold equity shares of a particular class;

"commission" means the Financial Institutions Commission under the Financial Institutions Act;

"constitution" means the document described in section 6 (1) and includes the constitution of a credit union incorporated under the Credit Union Act, R.S.B.C. 1979, c. 79, or incorporated under a former Credit Unions Act;

"corporation" means a company within the meaning of the Business Corporations Act, a body corporate, a body politic and corporate, an incorporated association or a society, however and wherever incorporated, but does not include a municipality or a corporation sole;

"credit union" means a corporation incorporated as a credit union under this Act, the Credit Union Act, R.S.B.C. 1979, c. 79, or a former Credit Unions Act, and includes a central credit union and a credit union continued into British Columbia under section 15.1, but does not include a credit union continued under the laws of another jurisdiction under section 15.2;

"debenture" includes an instrument, secured or unsecured, issued by a credit union which instrument is

(a) in bearer or registered form,

(b) of a kind commonly dealt in on securities exchanges or markets, or commonly recognized in any area in which it is issued or dealt in as a medium for investment, and

(c) evidence of an obligation or indebtedness of the credit union,

but does not include

(d) a negotiable unsecured promissory note maturing not more than one year after the date of issue,

(e) a receipt or another type of instrument issued by a credit union evidencing

(i) a deposit, or

(ii) an annuity payment, or

(f) an investment contract or mutual fund certificate;

"debt obligation" means a bond, debenture, note or other similar obligation, whether secured or unsecured, of a corporation;

"deposit business" means the business of receiving on deposit or soliciting for deposit money that is repayable

(a) on demand,

(b) after notice,

(c) on the expiry of a specified term, or

(d) at specified intervals for a specified term;

"deposit insurance corporation" means the Credit Union Deposit Insurance Corporation of British Columbia continued under the Financial Institutions Act;

"depositor" means a person who has money on deposit with a credit union, and includes a person who holds non-equity shares in a credit union;

"director" includes every person, by whatever name designated, who performs functions of a director;

"document" means a written instrument, including a notice, order, certificate, register, letter, report, return, account, summons or legal process;

"entity" includes a corporation, trust, partnership, fund or other unincorporated association or organization, the Crown in right of Canada or of a province, a Crown agent, a foreign government and an agency of a foreign government, but does not include an individual;

"equity share" means a share in a credit union that represents an equity interest in a credit union;

"extraprovincial credit union" means a credit union incorporated by or under the laws of a jurisdiction other than British Columbia and that is, under those laws, licensed, registered or in any way authorized to carry on activities that are substantially the same as trust business or deposit business or both;

"fair market value" means the amount, price, consideration or rent that would be obtained in an arm's length transaction in the open market between willing parties acting in good faith;

"financial statements" includes any notes to the financial statements;

"fund" means the fund continued under section 267 of the Financial Institutions Act;

"general insurance" means insurance that is not life insurance;

"general meeting" means a general meeting of members;

"insolvent" includes the inability of a credit union to pay its debts as they become due in the usual course of the credit union's business;

"member" means a person who has been admitted to membership or junior membership in a credit union and whose name is entered in its register of members, but does not include a person who is an auxiliary member;

"membership shares" means the shares of a distinct class of equity shares that, under section 44 (2) or (3), are the membership shares in a credit union;

"mortgage" includes a secured debt obligation;

"non-equity share" means a share in a credit union that

(a) evidences indebtedness of the credit union to the holder of the share, and

(b) does not represent an equity interest in the credit union;

"ordinary resolution" means a resolution passed by the members of a credit union in general meeting by a simple majority of the votes cast by members;

"printed" includes lithographed or reproduced by any mechanical, electrostatic or photostatic means;

"proxy" means a completed and executed form of proxy by which a member or auxiliary member has appointed a person as the nominee of the member or auxiliary member to attend and act for the member or auxiliary member and on behalf of the member or auxiliary member;

"public body" means

(a) a municipality or regional district,

(b) [Repealed 2003-52-45.]

(c) the Municipal Finance Authority of British Columbia under the Municipal Finance Authority Act,

(d) a government body under the Financial Administration Act, or

(e) a board, commission, authority or similar body established or authorized under an Act to administer, regulate, manage or undertake the operation of schools, libraries, hospitals, health facilities, irrigation systems, drainage systems, water supply systems, local improvements or public utilities, or to regulate or facilitate the regulation of agricultural and other natural products marketing, or to levy or raise taxes under the authority of an Act;

"registrar", except in section 61.2, has the same meaning as in the Business Corporations Act;

"rules" means the rules described in section 7 and includes the rules of a credit union incorporated under the Credit Union Act, R.S.B.C. 1979, c. 79, or incorporated under a former Credit Unions Act;

"security instrument" means security as defined in section 1 of the Securities Act;

"senior officer" means each of the 5 highest paid officers of a credit union and includes an individual who, whether or not among the 5 highest paid officers,

(a) is the chair or a vice chair of the board of directors or the president, a vice president, the secretary, the treasurer or the general manager of the credit union, or

(b) performs functions of the credit union similar to those normally performed by an individual occupying any of the offices described in paragraph (a);

"series meeting" means a meeting of members or auxiliary members who hold equity shares, other than membership shares, of a particular series;

"special resolution" means a resolution of which the notice required under section 78 has been given, and,

(a) in respect of a credit union other than a central credit union, or in respect of a central credit union the rules of which do not provide for that category of resolution as set out in section 92 (1.1), a resolution of the credit union or central credit union, passed by a majority of not less than 2/3 of the votes cast by members who are entitled to vote and,

(i) if the rules of the credit union provide as set out in section 72 or 73, who vote by any of the methods permitted under those rules, or

(ii) if the rules of the credit union do not provide as set out in section 72 or 73, who vote at a general meeting

(A) in person,

(B) through a representative who is present in person, if permitted by section 70 (3), or

(C) by a delegate who is present in person, if, in the case of a central credit union, the rules of the central credit union provide as set out in section 92 (1) (b) for voting by delegates, or

(b) in respect of a central credit union the rules of which provide for that category of resolution as set out in section 92 (1.1), a resolution of the central credit union, passed as permitted under those rules by a majority of votes that are cast by members who are entitled to vote and,

(i) if the rules of the central credit union provide as set out in section 72, who vote by any of the methods permitted under those rules, or

(ii) if the rules of the central credit union do not provide as set out in section 72, who vote at a general meeting

(A) in person,

(B) through a representative who is present in person, if permitted by section 70 (3), or

(C) by a delegate who is present in person, if the rules of the central credit union provide as set out in section 92 (1) (b) for voting by delegates;

"special rights or restrictions" includes special rights and restrictions, whether preferred, deferred or otherwise, and whether in regard to redemption or return of capital, conversion into or exchange for the same or any other number of any other kind, class or series of shares, dividend, voting, nomination or appointment of directors or other control, or otherwise, and for the purposes of this definition the words "special rights" and the word "restrictions", when used in this Act, whether together or separately, have a corresponding meaning;

"spouse" means a person who

(a) is married to another person, or

(b) is living with another person in a marriage-like relationship;

"superintendent" means the Superintendent of Financial Institutions appointed under the Financial Institutions Act;

"tribunal" means the Financial Services Tribunal under the Financial Institutions Act;

"trust business" means the business of providing or offering to provide services to the public as any of the following:

(a) trustee, executor or administrator;

(b) guardian of a minor's estate;

(c) committee, under the Patients Property Act, of a mentally disordered person's estate;

(d) attorney under Part 2 of the Power of Attorney Act;

(e) representative granted power over an adult's financial affairs under section 7 (1) (b) of the Representation Agreement Act.

(2) to (4) [Repealed 2011-29-19.]

Repealed

2  [Repealed 2011-29-20.]

Credit union relationships

2.1  (1) In this section, "voting share" means a share of a class of shares of a corporation that carries the right to vote under all circumstances on a resolution electing directors, and includes a share of a class of shares of a corporation that carries the right to vote on such a resolution because of the occurrence of a contingency that has occurred and is continuing.

(2) For the purposes of this Act, one corporation is affiliated with another corporation if

(a) one of them is a subsidiary of the other,

(b) both of them are subsidiaries of the same corporation, or

(c) each of them is controlled by the same person.

(3) For the purposes of this Act,

(a) an affiliate of a credit union is deemed to be affiliated with all corporations with which the credit union is affiliated, and

(b) a credit union is deemed to be affiliated with all corporations with which an affiliate of the credit union is affiliated.

(4) A reference to "subsidiary" in this Act must be read as including a corporation other than a central credit union or a corporation designated by regulation, if the corporation is controlled, within the meaning of subsection (5), by

(a) a credit union and one or more other credit unions, or

(b) a credit union and one or more other credit unions, and one or more other corporations if each of the other corporations is controlled by one or more credit unions,

and "holding credit union" has the corresponding meaning.

(5) For the purpose of subsection (4), a corporation is controlled by a group described in subsection (4) (a) or a group described in subsection (4) (b), as the case may be,

(a) if

(i) more than 50% of the voting shares in the corporation are held, other than by way of security only, by or for the benefit of that group, and

(ii) the votes carried by those voting shares are sufficient, if exercised, to elect a majority of the directors of the corporation, or

(b) if

(i) the charter of the corporation provides that the majority, or

(ii) the corporation is party to an agreement or arrangement under which the majority

of the corporation's directors must be nominees of that group.

Notice by mail

2.2  (1) If a notice, statement or report is sent by post, service or delivery of it is deemed to be effected by properly addressing, prepaying and mailing the notice, statement or report, and the service or delivery is deemed to have been effected on the 5th day, Saturdays and holidays excepted, following the date of mailing, unless the rules of a credit union provide for a longer period of time.

(2) If, on 3 consecutive occasions, the records sent by a credit union to a member or auxiliary member in accordance with subsection (1) are returned, the credit union is not required to send any further records to the member or auxiliary member until the member or auxiliary member informs the credit union in writing of the member's or auxiliary member's new address.

Repealed

3-5  [Repealed 2011-29-20.]

Part 2 — Incorporation and Significant Changes

Division 1 — Incorporation

Application for incorporation

6  (1) Subject to this Division, 25 or more persons who

(a) propose to form a credit union for the purpose of carrying on deposit business or both deposit business and trust business,

(b) complete an application in the prescribed form, and

(c) file the completed application with the superintendent,

may form a credit union by

(d) subscribing to a constitution prepared in accordance with subsection (2),

(e) adopting a common bond of membership that meets the requirements of section 40 (1), and

(f) adopting rules prepared in accordance with section 7.

(2) The constitution must

(a) be printed or typewritten,

(b) be divided into paragraphs numbered consecutively,

(c) contain the agreement of each subscriber to be a member of the credit union,

(d) contain the restrictions, if any, other than those imposed under this Act or the Financial Institutions Act, on the business to be carried on by the credit union or on the powers of the credit union, and

(e) be signed by every subscriber.

Rules

7  (1) A credit union must have rules for its conduct.

(2) The rules must be

(a) printed or typewritten,

(b) divided into paragraphs numbered consecutively, and

(c) signed by every subscriber.

(3) A credit union may, by its rules, adopt all or any of the prescribed model rules.

Registration documents

8  On the registrar receiving

(a) the constitution,

(b) the common bond of membership,

(c) the rules, and

(d) a notice of the credit union's

(i) registered office,

(ii) records office, and

(iii) offices in which the credit union proposes to carry on business,

the registrar, subject to section 11, must file the constitution, common bond of membership and rules and enter the name of the credit union in the register of financial institutions.

Effect of incorporation

8.1  The subscribers, together with other persons who become members of the credit union, are, on and from the date of incorporation mentioned in the certificate of incorporation, a credit union with the name contained in the constitution, capable immediately of exercising the functions of an incorporated credit union with the powers and with the liability on the part of the members provided in this Act.

Evidence of incorporation

9  On filing the constitution, common bond of membership and rules under section 8, the registrar must

(a) issue a certificate of incorporation showing that the credit union is incorporated under this Act, and

(b) publish notice of the incorporation in the Gazette or in any other prescribed manner.

Effect of constitution and rules

9.1  A credit union and its members and auxiliary members are bound by the credit union's constitution and rules and by any alterations made to those records under this Act, to the same extent as if those records

(a) had been signed and sealed by the credit union and by each member and auxiliary member, and

(b) contained covenants on the part of each member and auxiliary member and the successors and personal or other legal representatives of each member and auxiliary member to observe the constitution and rules.

Conclusiveness of certificate

10  A certificate of incorporation is conclusive evidence that the credit union has been incorporated under this Act, under the Credit Union Act, R.S.B.C. 1979, c. 79, or under a former Credit Unions Act.

Commission's consent to incorporation

11  (1) In this section, "applicants" means the subscribers applying to incorporate a credit union.

(2) The registrar must not file the constitution and rules of a credit union or enter its name in the register of financial institutions without first receiving the consent of the commission to the incorporation.

(3) The commission must not consent to the incorporation of a credit union unless

(a) the applicants have

(i) submitted to the commission the proposed constitution, common bond of membership and rules of the proposed credit union, and

(ii) paid the prescribed fee,

(b) the applicants have submitted to the commission a plan

(i) specifying the names and addresses of the individuals proposed by the applicants as the first directors and senior officers of the proposed credit union,

(ii) specifying whether the business proposed to be carried on by the proposed credit union is deposit business or both deposit business and trust business,

(iii) specifying the services that the proposed credit union intends to offer to its members,

(iv) describing, in detail satisfactory to the commission, the period within which the proposed credit union will meet the requirements for being issued a business authorization and specifying the preliminary activities, not being trust business or deposit business, that the proposed credit union proposes to carry on during that period, and

(v) containing prescribed additional information,

(c) the proposed constitution and rules comply with this Act and the regulations,

(d) the commission is satisfied that the preliminary activities set out in the plan under paragraph (b) are appropriate and in compliance with this Act,

(e) each of the proposed first directors and senior officers of the credit union has completed and submitted to the commission a personal information return in the prescribed form and disclosing the prescribed information,

(f) the applicants have satisfied the commission that the proposed credit union intends to obtain, and will be able to obtain, a business authorization to enable it to offer to the public, within a reasonable time after the incorporation, the services set out in the plan under paragraph (b),

(g) the applicants and proposed directors of the credit union are residents of British Columbia,

(h) the proposed common bond of membership complies with this Act,

(i) the applicants have satisfied the commission that the proposed credit union will have both the financial and managerial capacity to properly carry on the business proposed to be carried on by it in compliance with this Act,

(j) the commission is satisfied that

(i) the formation of the proposed credit union will be for the convenience and advantage of the members, and

(ii) the proposed credit union will be operated in a manner in which the investments and deposits of members will be safeguarded without likelihood of a claim on the fund, and

(k) the commission believes on reasonable grounds that it is not contrary to the public interest to consent to the incorporation.

(4) [Repealed 2004-48-4.]

(5) The commission may conduct an investigation and an applicant must provide to the commission information, verifications, forecasts of business operations or documents that the commission considers necessary in relation to the proposed incorporation.

Capacity and powers of credit unions

12  A credit union has the capacity and the rights, powers and privileges of an individual of full capacity.

Restricted businesses and powers

12.1  (1) A credit union must not

(a) carry on any business or exercise any power that the credit union is restricted by the credit union's constitution from carrying on or exercising, or

(b) exercise any of its powers in a manner inconsistent with those restrictions in the credit union's constitution.

(2) No act of a credit union, including a transfer of property, rights or interests to or by the credit union, is invalid merely because the act contravenes subsection (1).

Application to restrain

12.2  If a credit union contravenes or is about to contravene section 12.1 (1), the Supreme Court may, on application by a member, an auxiliary member, a receiver, a receiver manager, a liquidator or a trustee in bankruptcy of the credit union,

(a) restrain the credit union from doing an act or transferring or receiving property,

(b) make an order requiring compensation to be paid to the credit union or to any other party to a contract, and

(c) if it appears that a contract has not been substantially performed by a party to the contract, make the order the court considers necessary.

Preliminary activities

13  (1) A credit union that is incorporated but that does not have a business authorization must not undertake any activity other than an activity specified under section 11 (3) (b) (iv) as a preliminary activity in the plan described in section 11 (3) (b).

(2) Until a credit union receives a business authorization, the credit union, in every written communication, advertisement and document in which the name of the credit union appears, must add the following immediately after the name: "(Not authorized)".

Credit union without a member

13.1  A credit union must not carry on business without a member but, if at any time the credit union carries on business without a member for more than 6 months, every director and officer of the credit union during the time that the credit union so carries on business is jointly and severally liable for the payment of the whole of the debts of the credit union contracted during that time.

Name

14  (1) A credit union that proposes or is authorized to carry on business must have and use a name that includes the words "credit union", "caisse populaire" or "caisse d'economie".

(2) The name of a credit union must be reserved under section 14.1 and is subject to the approval of the commission.

(3) A person must not assume or use in British Columbia, or carry on any business in British Columbia under, a name that includes the words "credit union", "caisse populaire" or "caisse d'economie" or use any words in connection with the business of the person in a way likely

(a) to deceive or mislead the public, or

(b) to give a false impression that the person is a credit union.

Reservation of name

14.1  (1) A person wishing to reserve a name for the purposes of this Act must apply to the registrar.

(2) After receiving an application to reserve a name under subsection (1), the registrar may reserve the name for a period of 56 days from the date of reservation or any longer period that the registrar considers appropriate.

(3) After receiving a request for the extension of a reservation of a name, the registrar may, if that request is received before the expiry of that reservation, extend that reservation for the period that the registrar considers appropriate.

(4) The registrar must not reserve a name for the purposes of this Act unless the name complies with the prescribed requirements and with the other requirements set out in this Act.

(5) A name of which the registrar for good and valid reasons disapproves contravenes the requirements set out in this Act.

Name to be displayed

14.2  (1) A credit union must display its name in legible characters

(a) at every office or place at which the credit union carries on business, in a conspicuous position,

(b) in all notices and other official publications,

(c) on all the credit union's contracts, business letters and orders for goods, and on all the credit union's invoices, statements of accounts, receipts and letters of credit, and

(d) on all bills of exchange, promissory notes, endorsements, cheques and orders for money signed by the credit union or on the credit union's behalf.

(2) If a credit union has a common seal, the credit union must have its name engraved in legible characters on the common seal.

(3) If an officer or director of a credit union, or a person on the credit union's behalf, knowingly permits the credit union not to display or use the credit union's name as required by subsection (1) (a), (b) or (c) or by subsection (2), the officer, director or person, as the case may be, is personally liable to indemnify a purchaser or supplier of goods or services or a holder of any security of the credit union who suffers loss or damage as a result of being misled by that failure to display or use the name.

(4) If an officer or director of a credit union, or a person on the credit union's behalf, issues or authorizes the issue of any instrument referred to in subsection (1) (d) that does not display the name of the credit union, the officer, director or person, as the case may be, is personally liable to the holder of the instrument for the amount of the instrument, unless the instrument is duly paid by the credit union.

Repealed

15  [Repealed 2011-29-32.]

Division 2 — Significant Changes

Transfer of incorporation to British Columbia

15.1  (1) Subject to this section, an extraprovincial credit union, if it appears to the registrar to be authorized to do so by the laws of the jurisdiction in which it is incorporated, may deliver to the registrar an instrument of continuation in duplicate continuing the extraprovincial credit union as if it had been incorporated under this Act.

(2) The instrument of continuation must

(a) set out prescribed matters,

(b) be executed under seal and signed by an officer or director of the extraprovincial credit union and verified by a signed statement of the person signing the instrument of continuation, and

(c) be accompanied by other material required by the registrar.

(3) The instrument of continuation must make the amendments to the charter of the extraprovincial credit union that are necessary to make the instrument conform to the laws of British Columbia and may make other amendments permitted under this Act as if the extraprovincial credit union were incorporated under this Act as a credit union.

(4) If the registrar receives from an extraprovincial credit union under subsection (1)

(a) an instrument of continuation that complies with subsections (2) and (3),

(b) the prescribed fees, and

(c) the consent of the commission and the deposit insurance corporation,

the registrar must file one duplicate of the instrument of continuation and issue to the extraprovincial credit union a certificate of continuation to which the registrar must affix the other duplicate.

(5) The commission must not consent under subsection (4) (c)

(a) unless

(i) the directors of the extraprovincial credit union have submitted to the commission

(A) the name and address of the extraprovincial credit union,

(B) the financial statements of the extraprovincial credit union,

(C) the constitution and rules proposed for the continued credit union, and

(D) a plan for the continued credit union

(I) specifying whether the business proposed to be carried on is deposit business or trust business or both deposit business and trust business,

(II) specifying the services that the continued credit union intends to offer to the public,

(III) describing in detail satisfactory to the commission the period within which the credit union will meet the requirements for being issued a business authorization under the Financial Institutions Act and specifying the preliminary activities, not being deposit business or trust business, that the credit union proposes to carry on during that period, and

(IV) containing other information required by the commission,

(ii) the commission approves the constitution and rules submitted under paragraph (a), and

(iii) each proposed director and senior officer of the continued credit union has completed and submitted to the commission a personal information return in the form established by the commission that discloses the information required by the commission, and

(b) unless the commission believes on reasonable grounds that it is in the public interest to consent to the continuation.

(6) In addition to the requirements under subsection (5), the commission must not give a consent referred to in subsection (4) (c) unless satisfied that the extraprovincial credit union, in its primary jurisdiction as defined in section 157 of the Financial Institutions Act, is licensed, registered or authorized to carry on deposit business or trust business.

(7) On and after the date in a certificate of continuation issued to an extraprovincial credit union under subsection (4), this Act applies to the continued credit union to the same extent as if it had been incorporated under this Act as a credit union.

(8) A business authorization that an extraprovincial credit union has immediately before the date that a certificate of continuation is issued to the extraprovincial credit union under this section continues in force on and after that date, subject to a subsequent surrender of the business authorization, and to any amendment or the suspension, revocation or cancellation of the business authorization, under this Act.

Transfer of incorporation from British Columbia

15.2  (1) A credit union, if authorized by

(a) a special resolution,

(b) the consent given by the commission and the deposit insurance corporation for the purpose of this section, and

(c) the laws of another jurisdiction,

may apply to the proper officer of that other jurisdiction for an instrument of continuation continuing the credit union as if it had been incorporated under the laws of that other jurisdiction.

(2) A credit union ceases to be a credit union under this Act on and after the date on which it is continued under the laws of the other jurisdiction and the credit union must promptly file with the registrar and the commission a copy of the instrument of continuation certified by the proper officer of the other jurisdiction.

Effect of continuation

15.3  All rights of creditors against the property, rights and assets of an extraprovincial credit union continued under section 15.1 as a credit union and all liens on its property, rights and assets are unimpaired by the continuation, and all debts, contracts, liabilities and duties of the credit union from then on attach to the continued credit union and may be enforced against it.

Business acquisition by asset transfer

16  (1) A credit union (the "transferring credit union") may dispose of all or substantially all of its assets to another credit union (the "acquiring credit union"), but must not do so except in accordance with this section.

(2) A transferring credit union that intends, or under section 277 (g) of the Financial Institutions Act is ordered, to dispose of all or substantially all of its assets to an acquiring credit union, together with the acquiring credit union, must propose and submit to the commission an asset transfer agreement that specifies the following:

(a) the services that the acquiring credit union offers to its members and proposes to extend to members of the transferring credit union;

(b) the common bond of membership proposed for the acquiring credit union on and after the disposition becomes effective;

(c) the manner in which the issued and unissued shares of the transferring credit union will be exchanged for those of the acquiring credit union;

(d) the fair market value of the equity shares of any class in the transferring credit union, or a method of determining the fair market value of those equity shares of any class, for the purpose of section 24;

(e) a description of any of the transferring credit union's assets that are not being disposed of to the acquiring credit union, together with a statement showing how those assets are to be disposed of;

(f) a description of any of the transferring credit union's liabilities that are not being assumed by the acquiring credit union, together with a statement showing how those liabilities are to be dealt with;

(g) that the date of disposition to the acquiring credit union is to be the date stipulated under subsection (7) by the commission as the effective date of the asset transfer agreement.

(3) On receiving a proposed asset transfer agreement submitted to the commission, including one where the transferring credit union is acting under section 17 through an administrator,

(a) the commission may consent to the proposed asset transfer agreement, or

(b) if the commission considers that the proposed asset transfer agreement is contrary to the interests of the transferring credit union, the acquiring credit union or the members of either, the commission may refuse to consent to it.

(4) If the commission consents under subsection (3) to a proposed asset transfer agreement under which the transferring credit union is one that is not acting under section 17 through an administrator, then this subsection applies to the transferring credit union, and it must

(a) submit the proposed asset transfer agreement to its members for approval by special resolution, if it is a credit union that has issued no equity shares or has issued no equity shares other than the membership shares, or

(b) submit the proposed asset transfer agreement

(i) to its members for approval by special resolution, and

(ii) to the holders of each class of equity shares other than the membership shares for approval by a separate resolution of the holders of that class, requiring a majority of 2/3 of the votes cast,

if it is a credit union that has issued 2 or more classes of equity shares.

(5) If a transferring credit union to which subsection (4) applies has provided in its rules as set out in section 58 (2) respecting rights or special rights attached to its issued equity shares, then, on a separate resolution required under subsection (4) (b) (ii), each holder of equity shares in the class of equity shares in relation to which the vote is being held has one vote in respect of each equity share of that class of equity shares held by that holder.

(6) If the members or the members and other equity shareholders, as the case may be, of a transferring credit union to which subsection (4) applies have approved the proposed asset transfer agreement in compliance with subsections (4) and (5), the transferring credit union may enter into the proposed asset transfer agreement, which, when executed by the transferring credit union and the acquiring credit union, must be delivered to the commission together with a certified copy of each of any resolutions required in respect of a transferring credit union to which subsection (4) applies.

(7) On being satisfied

(a) as to the disposition of any assets not being disposed of under an asset transfer agreement, including one where the transferring credit union is acting under section 17 through an administrator, and

(b) that any liabilities that are not being assumed under the asset transfer agreement by the acquiring credit union have been adequately dealt with,

the commission must stipulate, as the effective date of the asset transfer agreement, a date not earlier than the date the commission receives the executed asset transfer agreement, and the commission must deliver

(c) the executed asset transfer agreement, and

(d) a certified copy of each of any resolutions required under subsection (4)

to the registrar together with written notice of the stipulated effective date.

(8) On receiving the executed asset transfer agreement, or the executed asset transfer agreement and a certified copy of each of any resolutions, delivered by the commission under subsection (7), the registrar must

(a) file the agreement or the agreement and a certified copy of each resolution, as the case may be,

(b) issue a certificate of business acquisition showing that, on the effective date (to be put in the certificate) stipulated by the commission under subsection (7), the acquiring credit union will have acquired the assets and assumed the liabilities of the transferring credit union and will carry on the business of both credit unions, and

(c) publish in the Gazette or in any other prescribed manner notice of the business acquisition showing the name and registered office of the acquiring credit union, the name of the transferring credit union and the date of the business acquisition.

Business acquisition directed by commission

17  (1) If

(a) an administrator of a credit union that is subject to the supervision of the commission has been appointed under section 277 (e) of the Financial Institutions Act, and

(b) the commission, under section 277 (g) of the Financial Institutions Act, orders the credit union (the "transferring credit union") to dispose of all of its assets, or part of its assets that constitutes substantially all of its assets, to another credit union ("the acquiring credit union"),

then, for the purpose of carrying out the order by means of an asset transfer agreement under section 16, the administrator has the powers and duties of the transferring credit union, and

(c) the administrator, together with the acquiring credit union, may propose and submit to the commission the asset transfer agreement as required under section 16 (2), and

(d) subject to receiving the consent of the commission under section 16 (3), the transferring credit union, through its administrator, may enter into the proposed asset transfer agreement, which, when executed by the transferring credit union and the acquiring credit union, must be delivered to the commission for the appropriate action under section 16 (7).

(2) For the purposes of a disposition of all or part of a credit union's assets and liabilities ordered by the commission under section 277 (g) of the Financial Institutions Act, the approval of the credit union's members and auxiliary members to the disposition is not required, despite anything in the credit union's constitution and rules.

Vesting in the acquiring credit union

18  On and after the effective date put in a certificate of business acquisition issued under section 16 (8) (b),

(a) the rights, property and assets of the transferring credit union are transferred to and vested in the acquiring credit union,

(b) the obligations and liabilities of the transferring credit union, including any obligations to members and auxiliary members under section 24,

(i) are transferred to and assumed by the acquiring credit union,

(ii) become the obligations and liabilities of the acquiring credit union, and

(iii) become enforceable against the acquiring credit union as if it had incurred them,

(c) each member and auxiliary member of the transferring credit union and of the acquiring credit union is bound by the asset transfer agreement, and

(d) each member of the transferring credit union becomes a member of the acquiring credit union and remains one until the member's membership ceases in accordance with section 45, 47, 48 or 49, or the rules of the acquiring credit union.

Dissolution of transferring credit union

19  On the effective date put in a certificate of business acquisition issued under section 16 (8) (b), the registrar must strike the transferring credit union off the register and, on the registrar doing that, the transferring credit union is dissolved.

Amalgamation

20  (1) Two or more credit unions (the "amalgamating credit unions") may amalgamate and continue as one credit union (the "amalgamated credit union"), but must not do so except in accordance with this section.

(2) Amalgamating credit unions, including any ordered under section 277 (g) of the Financial Institutions Act to amalgamate, together must propose and submit to the commission an amalgamation agreement that

(a) specifies

(i) the name of the proposed amalgamated credit union,

(ii) the terms and conditions of the amalgamation,

(iii) the manner of carrying the amalgamation into effect,

(iv) the names and addresses of the individuals proposed as the directors and senior officers of the proposed amalgamated credit union,

(v) whether the business proposed to be carried on by the proposed amalgamated credit union is deposit business or both deposit business and trust business,

(vi) the services that the proposed amalgamated credit union intends to offer to its members,

(vii) the common bond of membership of the proposed amalgamated credit union,

(viii) the manner in which the issued and unissued shares of each amalgamating credit union will be exchanged for those of the amalgamated credit union, and

(ix) the fair market value of the equity shares of any class, or a method of determining the fair market value of the equity shares of any class, for the purpose of section 24, and

(b) contains

(i) the constitution prepared in accordance with section 6, and

(ii) the rules prepared in accordance with section 7,

that are proposed as the constitution and rules of the amalgamated credit union.

(3) On receiving a proposed amalgamation agreement submitted to the commission, including one where one or more of the amalgamating credit unions is acting under section 21 through an administrator,

(a) the commission may consent to the proposed amalgamation agreement, or

(b) if the commission considers that the proposed amalgamation agreement is contrary to the interests of one or more of the amalgamating credit unions or its or their members, the commission may refuse to consent to it.

(4) If the commission consents under subsection (3) to a proposed amalgamation agreement under which any of the proposed amalgamating credit unions is one that is not acting under section 21 through an administrator, then this subsection applies to that amalgamating credit union, and it must

(a) submit the proposed amalgamation agreement to its members for approval by special resolution, if it is a credit union that has issued no equity shares or has issued no equity shares other than the membership shares, or

(b) submit the proposed amalgamation agreement

(i) to its members for approval by special resolution, and

(ii) to the holders of each class of equity shares other than the membership shares for approval by a separate resolution of the holders of that class, requiring a majority of 2/3 of the votes cast,

if it is a credit union that has issued 2 or more classes of equity shares.

(5) If an amalgamating credit union to which subsection (4) applies has provided in its rules as set out in section 58 (2) respecting rights or special rights attached to its issued equity shares, then, on a separate resolution required under subsection (4) (b) (ii), each holder of equity shares in the class of equity shares in relation to which the vote is being held has one vote in respect of each equity share of that class of equity shares held by that holder.

(6) If the members or the members and other equity shareholders, as the case may be, of an amalgamating credit union to which subsection (4) applies have approved the proposed amalgamation agreement in compliance with subsections (4) and (5), that amalgamating credit union may enter into the proposed amalgamation agreement, which, when executed by each of the amalgamating credit unions, including any of them acting under section 21 through an administrator, must be delivered to the registrar together with a certified copy of each of any resolutions required in respect of an amalgamating credit union to which subsection (4) applies.

(7) On receiving the executed amalgamation agreement, or the executed amalgamation agreement and a certified copy of each of any resolutions, delivered under subsection (6), the registrar must

(a) file the agreement or the agreement and a certified copy of each resolution, as the case may be,

(b) issue a certificate of amalgamation showing that the amalgamating credit unions are amalgamated and the date of the amalgamation, which must not be earlier than the date the documents are received by the registrar, and

(c) publish in the Gazette or in any other prescribed manner notice of the amalgamation showing the names of the amalgamating credit unions, the name of the amalgamated credit union, the address of its registered office and the date of the amalgamation.

Amalgamation directed by commission

21  (1) If,

(a) an administrator of a credit union that is subject to the supervision of the commission has been appointed under section 277 (e) of the Financial Institutions Act, and

(b) the commission, under section 277 (g) of the Financial Institutions Act, orders the credit union (the "credit union ordered to amalgamate") to amalgamate with one or more other credit unions,

then, for the purpose of carrying out the order by means of an amalgamation agreement under section 20, the administrator has the powers and duties of the credit union ordered to amalgamate, and

(c) the administrator, together with the other amalgamating credit unions, may propose and submit to the commission the amalgamation agreement required under section 20 (2), and

(d) subject to receiving the consent of the commission under section 20 (3), the credit union ordered to amalgamate may enter into the proposed amalgamation agreement through its administrator, and, when executed by each of the amalgamating credit unions, the agreement must be delivered to the registrar in accordance with section 20 (6).

(2) For the purposes of an amalgamation ordered by the commission under section 277 (g) of the Financial Institutions Act, the approval of the members or auxiliary members of the credit union ordered to amalgamate to the amalgamation is not required, despite anything in the constitution and rules of the credit union ordered to amalgamate.

No interruption in business on amalgamation

22  On an amalgamation under section 20, the amalgamated credit union

(a) may carry on business under the business authorization issued with respect to one of the amalgamating credit unions, as the commission may direct, until the amalgamated credit union has been granted a new business authorization under section 61 of the Financial Institutions Act, and

(b) has 30 days in which to apply under section 61 (4) of the Financial Institutions Act for a new business authorization.

Vesting on amalgamation

23  On and after the date of the amalgamation shown in a certificate of amalgamation issued under section 20 (7) (b),

(a) the amalgamating credit unions are amalgamated and are continued as one credit union under the name and with the constitution and rules provided in the amalgamation agreement,

(b) the amalgamated credit union is seized of and holds and possesses all the property, rights and interests and is subject to all the debts, liabilities and obligations of each amalgamating credit union, including any obligations to members or auxiliary members under section 24, and

(c) every member and auxiliary member of each amalgamating credit union is bound by the amalgamation agreement.

Right to redeem equity shares on business acquisition or amalgamation

24  (1) If

(a) a transferring credit union, including one acting under section 17 through an administrator, enters into an asset transfer agreement under section 16, or

(b) an amalgamating credit union, including one acting under section 21 through an administrator, enters into an amalgamation agreement under section 20,

the transferring credit union or amalgamating credit union, as the case may be, must deliver immediately to

(c) each member holding equity shares in the transferring credit union or amalgamating credit union, other than membership shares, and

(d) each auxiliary member, if any, of the transferring credit union or amalgamating credit union

a notice advising the member or auxiliary member of the rights under this section of the member or auxiliary member.

(2) On receiving the notice under subsection (1), the member or auxiliary member is entitled to require that the acquiring credit union or amalgamating credit union, as the case may be, purchase all of the member's or auxiliary member's equity shares.

(3) In order to exercise the right conferred by subsection (2), the member or auxiliary member must deliver to the registered office of the acquiring credit union or the amalgamating credit union, as the case may be, within 14 days after the date of the notice under subsection (1), a notice requiring the acquiring credit union or amalgamating credit union to purchase all of the member's or auxiliary member's equity shares.

(4) If a member or auxiliary member exercises the right conferred by subsection (2) in accordance with subsection (3), the member or auxiliary member is obliged to sell all of the member's or auxiliary member's equity shares to the acquiring credit union or the amalgamating credit union, and the credit union is obliged to purchase them, at the fair market value determined under the asset transfer agreement entered into under section 16 or the amalgamation agreement entered into under section 20, as the case may be.

(5) A member or auxiliary member who exercises the member's or auxiliary member's right under subsection (2)

(a) must not withdraw the requirement to purchase the equity shares, unless the credit union consents to the withdrawal, and

(b) until paid in full, may exercise and assert all the rights of a creditor of the credit union.

(6) If a member or auxiliary member exercises the member's or auxiliary member's right under subsection (2) but the credit union is prohibited under section 64 (8) from purchasing equity shares issued by the credit union, the credit union remains obligated under this section to purchase the member's or auxiliary member's equity shares and must purchase them as soon as no longer prohibited from doing so under section 64 (8).

(7) A credit union may apply the purchase price for equity shares it must purchase under this section, and any declared but unpaid dividends on those equity shares, in satisfaction of indebtedness owed to the credit union by the person to whom the purchase price and dividends are due, and then the credit union must pay any balance to the person.

(8) A credit union must not exercise its right under subsection (7) in respect of jointly held equity shares or dividends on them

(a) except with the consent of each of the joint holders, or

(b) unless each of the joint holders is indebted to the credit union.

Division 3

Repealed

25-39  [Repealed 2011-29-36.]

Part 2.1 — Winding Up

Division 1 — Voluntary Winding Up

Voluntary winding up requires special resolution

25.1  Subject to sections 25.2 and 25.3, a credit union may be wound up voluntarily if the credit union so resolves by special resolution.

Solvency of credit union for voluntary winding up

25.2  (1) If it is proposed to wind up a credit union voluntarily, the majority of the directors, before calling the general meeting at which the special resolution for the winding up of the credit union is to be proposed, must make an affidavit declaring that

(a) they have made a full inquiry into the affairs of the credit union, and

(b) they are of the opinion that the credit union will be able to pay its debts in full within the period, not exceeding 12 months from the commencement of the winding up, specified in the affidavit.

(2) An affidavit referred to in subsection (1) must

(a) be made within 5 weeks before the date on which the members pass the special resolution for the voluntary winding up of the credit union, and

(b) contain a statement of the assets and liabilities of the credit union as at the latest practicable date.

(3) A copy of the affidavit must be

(a) filed with the registrar before the meeting, and

(b) presented to the meeting at which the special resolution for the voluntary winding up of the credit union is to be proposed.

(4) If a credit union is wound up in accordance with a special resolution passed within 5 weeks after the making of the affidavit, but the credit union's debts are not paid or provided for in full within the period stated in the affidavit, it is presumed, until the contrary is shown, that the person swearing the affidavit did not have reasonable grounds for his or her opinion.

Notice must be given to commission

25.3  A special resolution under section 25.1 has no effect unless 30 days' notice in writing of the credit union's intention to pass the resolution has been given to the commission.

Commencement of voluntary winding up

26.1  A voluntary winding up commences when the special resolution to wind up is passed.

Appointment of liquidator

26.2  (1) If a credit union passes a special resolution to wind up voluntarily under section 25.1, the credit union must promptly deliver written notice of the special resolution to the commission.

(2) On receiving notice under subsection (1), the commission must appoint one or more liquidators, who may be the commission's own employee or employees, for the purpose of winding up the affairs and distributing the assets of the credit union.

Remuneration of liquidator

26.3  The remuneration of a liquidator in a voluntary winding up of a credit union must be set by the commission.

Division 2 — Winding Up by Court Order

Winding up by court order

27.1  (1) A credit union may be wound up by an order of the Supreme Court on the application of

(a) the credit union,

(b) a member or an auxiliary member,

(c) a beneficial owner of an equity share in the credit union,

(d) a director, creditor, trustee for debentureholders or receiver manager of the credit union,

(e) the commission, or

(f) any other person who, in the discretion of the Supreme Court, is a proper person to make an application.

(2) Before hearing an application by a creditor to wind up a credit union by court order, the Supreme Court may require the creditor to give security for the costs of the application.

(3) The Supreme Court may order that the credit union be wound up

(a) if the court thinks it just and equitable to do so, or

(b) when an event occurs on the occurrence of which the constitution or rules provide that the credit union is to be dissolved.

(4) The commission is party to any proceedings in which an application is made to the Supreme Court under this section.

Commencement of winding up by court order

27.2  A winding up by court order commences on the date of the order.

Court must appoint liquidator

27.3  If the Supreme Court makes an order that a credit union be wound up, the court, by the same or a subsequent order, must appoint one or more liquidators for the purpose of winding up the affairs and distributing the assets of the credit union.

Remuneration of liquidator

28.1  The remuneration of a liquidator in a winding up by court order must be set by the Supreme Court.

Division 3 — Winding Up by Commission

Winding up directed by commission

28.2  If, under section 277 (g) of the Financial Institutions Act, the commission orders that a credit union that is subject to the commission's supervision be wound up, then

(a) sections 25.1, 25.2, 26.1 and 31.3 of this Act do not apply,

(b) the winding up commences at the time of the order that the credit union be wound up,

(c) the commission must promptly appoint one or more liquidators, who may be the commission's own employee or employees, for the purpose of winding up the affairs and distributing the assets of the credit union,

(d) the commission must promptly file with the registrar a copy of the order and notify the registrar of the appointment under paragraph (c) of one or more liquidators, and

(e) the commission must promptly publish in the Gazette or in any other prescribed manner notice of its order that the credit union be wound up.

Remuneration of liquidator

28.3  The remuneration of a liquidator in a winding up of a credit union ordered under section 277 (g) of the Financial Institutions Act must be set by the commission.

Winding up on direction of commission

29.1  (1) If the commission believes on reasonable grounds that it is contrary to the public interest that a credit union that has not been issued a business authorization continue in business, the commission may order that the credit union be wound up.

(2) Without limiting subsection (1), if a credit union

(a) has fewer than 25 members,

(b) has contravened section 13,

(c) has not applied for a business authorization within one year or the further period ordered by the commission under section 61 (2) of the Financial Institutions Act after the date of its incorporation, or

(d) is refused a business authorization,

the commission may order that the credit union be wound up.

(3) If the commission makes an order under this section, the references in sections 27.2, 27.3, 28.1, 31.1 (2), 31.3 (1) (b) and (3), 32.3 (1), 33.2 (3), 34.2 and 38.1 (3) to the Supreme Court or a court order must be read for the purposes of the winding up ordered by the commission as references to the commission or to an order of the commission.

(4) On the winding up of a credit union under this section, the registrar must publish in the Gazette or in any other prescribed manner notice that the credit union is being wound up and the date of the winding up order.

(5) The cost of the publication under subsection (4) must be paid by the credit union to the government and is recoverable by the government from the credit union as a simple contract debt.

Division 4 — Effect of Winding Up

Effect of resolution or order for winding up

29.2  If a credit union is being wound up,

(a) the credit union, from the commencement of the winding up, must cease to carry on the credit union's business, except so far as is required, in the opinion of the liquidator, for the credit union's beneficial winding up, but the corporate status and corporate powers and capacity of the credit union continue until the credit union is dissolved,

(b) on the appointment of the liquidator, the powers of the directors cease, except so far as the liquidator approves their continuance, and

(c) any transfer of shares made after the commencement of the winding up, except a transfer made to or with the approval of the liquidator, is void.

Examination of credit union winding up

29.3  The commission may at any time examine the records of a credit union that is being wound up.

Powers of Supreme Court

30.1  If a credit union is being wound up, the Supreme Court may,

(a) on application by a member, an auxiliary member or director of the credit union, order a general meeting, class meeting or meeting of the creditors of the credit union to be held and conducted in the manner the court considers appropriate,

(b) on application by any of the persons mentioned in section 27.1 (1), make an order for the audit or the inspection of the accounts, books and papers of, or in possession of, the liquidator that the court considers appropriate,

(c) on application by the liquidator, set a time within which creditors are to prove their debts or claims or be excluded from the benefit of any distribution to be made by the liquidator,

(d) in a voluntary winding up, appoint a liquidator on application by a member or an auxiliary member if

(i) there is no liquidator acting, and

(ii) it is impractical or impossible to hold a general meeting of the credit union for the purpose of filling the vacancy,

(e) on cause shown by any of the persons mentioned in section 27.1 (1), remove a liquidator and fill any vacancy in the office of the liquidator,

(f) on terms and conditions the court considers appropriate, release a liquidator who has

(i) resigned,

(ii) been removed from office, or

(iii) in the liquidator's opinion, fully wound up the affairs of the credit union,

(g) on application by any of the persons mentioned in section 27.1 (1), confirm, reverse or modify any act or decision of a liquidator and make any order the court considers appropriate,

(h) if a liquidator does not faithfully perform the liquidator's duties, inquire into the matter and take the action the court considers appropriate,

(i) on application by any of the persons mentioned in section 27.1 (1),

(i) examine into the conduct of any person who has taken part in the formation or promotion of the credit union or any person who is a past or present director, officer, receiver, receiver manager, liquidator, member or auxiliary member of the credit union if it appears that that person

(A) has misapplied, retained or become liable or accountable for any money or property in relation to the credit union, or

(B) has become liable or accountable for any breach of trust in relation to the credit union, and

(ii) compel the person referred to in subparagraph (i) to repay or to restore the money or property, or any part of the money or property, with interest at the rate the court considers appropriate, or to contribute the sum to the assets of the credit union by way of compensation in respect of the misapplication, retainer or breach of trust as the court considers appropriate,

and this provision applies even if the conduct complained of is conduct for which the person may be liable to prosecution,

(j) on terms and conditions the court considers appropriate, make an order staying the proceedings, either absolutely or for a limited time, and

(k) on application by the liquidator, give directions in relation to any matter arising under the winding up.

Additional powers of Supreme Court

30.2  The Supreme Court's powers under section 30.1 in respect of the winding up of credit unions include the power to extend any time limited by this Act for the filing or publishing of notices, accounts, reports or documents or for the holding of any meeting.

Duty to assist liquidator

30.3  A person who is a present or former director, receiver manager, officer, employee, banker, auditor, member, auxiliary member or agent of, or is a present or former receiver of property of, a credit union that is being wound up or of any affiliate of it must,

(a) on inquiry by the liquidator, fully and truly inform the liquidator, to the best of the person's knowledge and belief, of all the property of the credit union, and how, to whom, for what consideration and when the credit union disposed of any part of the property, except any part disposed of in the ordinary course of business of the credit union,

(b) on request of the liquidator, deliver to the liquidator, or as the liquidator directs, all the property of the credit union in the custody or under the control of the person, and

(c) on request of the liquidator, deliver to the liquidator, or as the liquidator directs, every record, including every document, instrument and accounting record, in the custody or under the control of the person and belonging to the credit union.

Division 5 — Liquidators

Qualification of liquidator

31.1  (1) A person not qualified to become or act as a receiver or receiver manager under section 64 of the Personal Property Security Act is not qualified to become or act as a liquidator, except that, with the consent in writing of all the members and auxiliary members of a credit union, a person referred to in section 64 (2) (e) of the Personal Property Security Act is qualified to become or act as a liquidator of the credit union.

(2) A person who has been appointed as a liquidator in a winding up by court order and who is not, or who ceases to be, qualified to act as a liquidator must promptly bring the disqualification to the attention of the Supreme Court and the person on whose application the liquidator was appointed.

Validity of acts of liquidator

31.2  An act of a liquidator is valid, despite any defect in the liquidator's appointment or qualifications.

Filing and publication of notice of appointment

31.3  (1) A liquidator must, within 10 days after his or her appointment as liquidator, file with the registrar

(a) a notice of the appointment in the form established by the registrar, and

(b) if not already filed,

(i) if the winding up is a voluntary winding up, a certified copy of the special resolution to so wind up, or

(ii) if the winding up is by court order, a certified copy of the order.

(2) A liquidator must, within 7 days after changing his or her address, file with the registrar notice of the new address.

(3) At the commencement of the winding up, the liquidator must publish in the Gazette notice that the credit union has resolved to wind up voluntarily or that the Supreme Court has made an order that the credit union be wound up by court order, as the case may be.

Meeting of creditors

32.1  (1) A liquidator must, within 14 days after his or her appointment as liquidator,

(a) mail to every person who appears to the liquidator to be a creditor of the credit union a notice that a meeting of the creditors of the credit union will be held on a date, being not less than 21 days and not more than 28 days after the appointment, at an hour and at a place in British Columbia specified in the notice, and

(b) advertise notice of the meeting

(i) in the Gazette, and

(ii) in a local newspaper circulating in the district where the registered office is located or where the principal place of business of the credit union in British Columbia was located.

(2) The liquidator must present to the meeting of creditors referred to in subsection (1) a full statement of the position of the affairs of the credit union, including a list of the creditors of the credit union and the estimated amount of their claims, and the creditors are at liberty to discuss any matter arising out of the statement.

Creditor must commence action on claim

32.2  If the liquidator of a credit union gives notice in writing by registered letter to a creditor of the credit union that the debt or claim of the creditor is disputed or rejected, the creditor may commence an action in respect of the debt or claim within 3 months after the notice is given, and, in default of the commencement of the action within that time, the debt or claim of the creditor is forever barred.

Custody of property

32.3  (1) The liquidator of a credit union, subject to any restrictions or directions imposed or given by the Supreme Court, must

(a) take into the liquidator's custody or under the liquidator's control all the property and things in action to which the credit union is or appears to be entitled, and all the credit union's records, documents and instruments,

(b) use, subject to this Act, the liquidator's own discretion in realizing the assets of the credit union and distributing them among the creditors, members and auxiliary members,

(c) keep proper accounting records,

(d) keep proper minutes of proceedings at meetings and of other matters relating to the winding up,

(e) cause to be stated on every invoice, order for goods and business letter

(i) issued by the liquidator or on the liquidator's behalf, and

(ii) on or in which the name of the credit union appears

that the credit union is in liquidation, and

(f) describe himself or herself as the liquidator of the credit union.

(2) If a winding up continues for more than one year, the liquidator must

(a) call a general meeting of the credit union at the end of the first year and at the end of each succeeding year after the commencement of the winding up, or as soon as may be convenient,

(b) present to the general meeting an account of the liquidator's acts and dealings and of the conduct of the winding up during the preceding year, and

(c) file with the registrar, within 7 days after the date on which the meeting is held, a verified summary of the liquidator's receipts and payments during that year.

(3) A liquidator must comply with Part 2.2 in respect of the records, documents and instruments of the credit union.

Liquidator to notify commission of offence

33.1  If it appears to the liquidator of a credit union that any past or present director, officer, employee, receiver, receiver manager, auditor, liquidator, member or auxiliary member of the credit union has been guilty of any offence in relation to the credit union, the liquidator must notify the commission.

Powers of liquidator

33.2  (1) Subject to this section, a liquidator, so far as may be necessary for the beneficial winding up of the affairs and distribution of the assets of a credit union, has the powers of the directors and officers, and may exercise the powers of the credit union that are not required by this Act to be exercised by the credit union in general meeting.

(2) In a voluntary winding up, the credit union, by ordinary resolution, may direct that the liquidator not do certain specified things without

(a) the approval of a general meeting of the credit union,

(b) the written consent of certain specified members or specified auxiliary members, or

(c) the written consent of a certain specified number of members or auxiliary members.

(3) In any winding up, the Supreme Court may impose, either generally or with respect to certain matters, restrictions on the exercise of the powers of a liquidator.

(4) Until required for distribution, cash balances held by the liquidator of a credit union may be invested as follows:

(a) in an interest bearing account with any savings institution;

(b) as permitted under the provisions of the Trustee Act respecting the investment of trust property by a trustee,

and any dividends or interest received from the investments form part of the assets of the credit union.

(5) If several liquidators are appointed, every power given to a liquidator may be exercised

(a) by the one or more of them that may be determined at the time of their appointment or subsequently, or

(b) in the absence of any determination, by any 2 or more liquidators.

Resignation and removal of liquidator

33.3  (1) A liquidator appointed in a voluntary winding up of a credit union or a winding up of a credit union ordered under section 277 (g) of the Financial Institutions Act may resign from that office.

(2) If, in the opinion of the commission,

(a) a voluntary winding up of a credit union, or

(b) a winding up of a credit union ordered under section 277 (g) of the Financial Institutions Act

is being carried on in an unsafe or unauthorized manner or is being unduly delayed, the commission, by notice addressed to the liquidator, may remove the liquidator from office.

(3) If a vacancy occurs by death, resignation or otherwise in the office of liquidator in

(a) a voluntary winding up of a credit union, or

(b) a winding up of a credit union ordered under section 277 (g) of the Financial Institutions Act,

the commission must appoint a liquidator to fill the vacancy.

Liquidator ceasing to act must file notice

34.1  A liquidator who resigns, is removed from office or for any other reason ceases to act, must, within 7 days after the resignation, removal or cessation, file with the registrar a notice in the form established by the registrar.

Filling vacancy in office of liquidator

34.2  If a vacancy in the office of the liquidator occurs by death, resignation or otherwise in a winding up by court order, the Supreme Court may fill the vacancy on application of any person mentioned in section 27.1 (1).

Division 6 — Disposing of Assets of Credit Union

Liquidator's powers of disposition

34.3  In consideration of financial assistance by the deposit insurance corporation to the credit union, a liquidator of a credit union may transfer and assign all or any assets of the credit union to the deposit insurance corporation.

Sale of credit union for shares or debentures

35.1  (1) If a credit union is being wound up and it is proposed to transfer or sell the whole or part of the credit union's business or property to a corporation, the liquidator of the credit union being wound up may, with the approval of a special resolution of that credit union that confers on the liquidator either a general authority or an authority in respect of any particular arrangement, in compensation or part compensation for the transfer or sale,

(a) receive shares, debentures or other similar interests in the corporation for distribution among the members or auxiliary members of the credit union being wound up, or

(b) enter into any other arrangement by which the members or auxiliary members of the credit union being wound up may, instead of or in addition to receiving cash, shares, debentures or other similar interests, participate in the profits of or receive any other benefit from the corporation.

(2) No special resolution referred to in subsection (1) is invalid for the purposes of this section merely because the resolution is passed before or concurrently with a resolution for winding up the credit union or for appointing the credit union's liquidator.

(3) Despite subsections (1) and (2), a liquidator of a credit union must not sell all or substantially all of the assets of the credit union to another credit union except in compliance with section 16.

Satisfaction of liabilities on winding up

35.2  If a credit union is being wound up, any property of the credit union remaining after satisfaction of all liabilities of the credit union, including the costs of winding up and dissolution, is surplus property and must be dealt with in accordance with sections 35.3 and 36.1.

Distribution of surplus if credit union has not issued equity shares

35.3  If the credit union being wound up has not issued any equity shares, the liquidator must apply the surplus property as follows:

(a) by declaring and paying a dividend, at a reasonable rate determined by the liquidator, on the non-equity shares in respect of the period from the beginning of the credit union's current fiscal year to the date of commencement of the winding up;

(b) after payment of the dividend under paragraph (a), by paying or delivering the balance to the deposit insurance corporation.

Distribution of surplus if credit union has issued equity shares

36.1  If the credit union being wound up has issued equity shares, the liquidator must convert into money any surplus property that is not money, and then must apply the money as follows:

(a) by declaring and paying a dividend, at a reasonable rate determined by the liquidator, on the non-equity shares in respect of the period from the beginning of the credit union's current fiscal year to the date of commencement of the winding up;

(b) after payment of the dividend under paragraph (a), by distributing the balance to the equity shareholders according to their rights and interests in the credit union.

Members' or auxiliary members' indebtedness to credit union

36.2  The liquidator of a credit union may apply the amount of a dividend under section 35.3 (a) or of a dividend or distribution under section 36.1 in satisfaction of indebtedness owed to the credit union by the member or auxiliary member to whom the amount is due, and then the credit union must pay any balance to the member or auxiliary member.

Unclaimed or undistributed assets

36.3  (1) In this section, "administrator" has the same meaning as in the Unclaimed Property Act.

(1.1) If a liquidator has or controls any unclaimed or undistributed assets or money of a credit union that is being wound up and the assets or money have remained unclaimed or undistributed for more than 6 months after the date on which any dividend, or other distribution of assets or money, declared by the liquidator became payable or distributable, the liquidator must publish in one or more newspapers selected by the liquidator a statement of

(a) the assets or money unclaimed or undistributed,

(b) the procedure required to claim the assets or money, and

(c) the date, not sooner than 60 days after or later than 120 days after the publication, on which date the liquidator will deliver or pay

(i) to the deposit insurance corporation any part of the assets or money apparently due to, but unclaimed by, members of the credit union, or

(ii) to the administrator any part of the assets or money apparently due to, but unclaimed by, auxiliary members or creditors of the credit union or other non-members of the credit union.

(2) On the date published under subsection (1.1) (c), the liquidator must deliver or pay

(a) to the deposit insurance corporation any part of the assets or money apparently due to, but unclaimed by, members of the credit union, or

(b) to the administrator any part of the assets or money apparently due to, but unclaimed by, auxiliary members or creditors of the credit union or other non-members of the credit union,

together with a statement showing, to the extent known to the liquidator, the full names and last known addresses of the persons appearing to be entitled to the assets or money and the amount to which each appears to be entitled.

(3) The receipt of the deposit insurance corporation for the assets or money referred to in subsection (2) (a) or of the administrator for the assets or money referred to in subsection (2) (b) is an effective discharge to the liquidator for them.

(4) The administrator, in respect of assets paid or delivered to the administrator under this section, may realize any assets, and any money received or realized under this section is deemed to be unclaimed money deposits under the Unclaimed Property Act.

(5) If

(a) the deposit insurance corporation, under subsection (2) (a), has received assets or money unclaimed by members of a credit union,

(b) application is made to the deposit insurance corporation by or on behalf of a former member of the credit union, and

(c) the deposit insurance corporation is satisfied that the former member was entitled to but did not receive

(i) a dividend declared under section 35.3 (a) or 36.1 (a) on non-equity shares in the credit union, or

(ii) a share of a distribution made under section 36.1 (b),

the deposit insurance corporation must pay to that former member the amount of the dividend or share of the distribution, together with accrued interest at a reasonable rate determined by the deposit insurance corporation.

Division 7 — Completion of Winding Up

Final meeting and dissolution

37.1  (1) As soon as the affairs of a credit union are fully wound up, the liquidator must

(a) prepare an account of the winding up showing how the winding up was conducted and how the property of the credit union was disposed of, and

(b) call a final general meeting of the credit union for the purpose of presenting the account and giving any explanation of the account.

(2) The final general meeting referred to in subsection (1) must be called by publishing notice of the meeting in the Gazette not less than 14 days before the meeting, specifying the date, time, place and object of the meeting, and no other notice is necessary.

(3) The liquidator, not more than 7 days after the final general meeting, must file with the registrar a copy of the account and a return in the form established by the registrar.

Dissolution on completion of winding up

38.1  (1) The registrar, on receiving the copy of the account and the return referred to in section 37.1, must file them.

(2) Three months after the filing referred to in subsection (1), the credit union is dissolved.

(3) On application by the liquidator or by any person mentioned in section 27.1 (1), the Supreme Court may make an order deferring the date on which the dissolution of the credit union is to take effect for the time the court considers appropriate.

(4) No order made under this section is effective unless a certified copy of the order is filed with the registrar before the credit union is dissolved under subsection (2).

Notice on dissolution

39.1  In addition to fulfilling the requirements of section 37.1, the liquidator of a credit union,

(a) not more than 14 days after the date of the final general meeting required under section 37.1 (1), must publish in one or more newspapers selected by the liquidator a notice that the affairs of the credit union have been wound up, and

(b) must file with the commission a copy of the account showing how the winding up has been conducted and how the property of the credit union has been disposed of, together with a copy of the newspaper notice.

Disposal of books and papers of credit union

39.2  If a credit union has been dissolved, the liquidator is responsible for the care and custody of the credit union's records, including documents, instruments and accounting records, for 2 years after the date of dissolution, but not longer.

Discharge by court order

39.3  An order of the Supreme Court releasing a liquidator discharges the liquidator from all liability in respect of any act done or default made by the liquidator in the administration of the affairs of the credit union or otherwise in relation to the liquidator's conduct in that capacity, but that order may be revoked on proof that it was obtained by fraud or by suppression or concealment of any material fact.

Part 2.2 — Offices and Records

Division 1 — Credit Union Offices

Registered and records offices

39.4  (1) A credit union must, at all times, maintain a registered office and, for the purposes of section 39.42, a records office, both in British Columbia and both at the locations set out in

(a) the notice referred to in section 8 (d), or

(b) if a notice of change of address has been filed with the registrar, the latest filed notice of change of address.

(2) The registered office and the records office may be located at the same place.

Change of registered or records office

39.41  (1) The directors of a credit union may change the location of the credit union's registered office or records office in British Columbia by

(a) passing a resolution authorizing the change, and

(b) filing with the registrar 2 copies of a notice of change of address in the form established by the registrar.

(2) No change in the location of the registered office or records office is effective until subsection (1) has been complied with.

(3) When subsection (1) has been complied with, the registrar must forward to the previous registered office or records office one copy of the notice of change of address bearing evidence that the notice of change of address has been filed with the registrar.

(4) If the registered office or records office is located at the place of business of a credit union's agent or solicitor and that agent or solicitor moves the agent's or solicitor's place of business to another location, the agent or solicitor must file with the registrar a notice of change of address, in the form established by the registrar, for each credit union having a registered office or records office at the agent's or solicitor's place of business, and subsections (1) to (3) do not apply.

(5) A change in the location of the registered office or records office under subsection (4) is not effective until that subsection has been complied with.

Division 2 — Records

Records office documents

39.42  A credit union must keep at its records office the following records:

(a) the credit union's certificate of incorporation;

(b) a copy of the credit union's constitution including every amendment of it;

(c) a copy of the credit union's rules including every amendment of them;

(d) the credit union's register of directors;

(e) the minutes of every general meeting and class meeting of the credit union;

(f) the minutes of every meeting of the credit union's directors;

(g) a copy of every document filed by the credit union with the registrar;

(h) a copy of every certificate issued to the credit union by the registrar;

(i) a copy of every order of the superintendent or the commission relating to the credit union unless the superintendent or the commission, in that order or in another order, orders that that order need not be kept at the records office;

(j) a copy of every order of the registrar relating to the credit union;

(k) a copy of every other document and instrument approved in the preceding 10 years by the directors;

(l) a copy of every mortgage created or assumed by the credit union, whether or not required to be registered;

(m) a copy of all audited financial statements of the credit union and its subsidiaries, whether or not consolidated with the financial statements of the credit union, including the auditor's reports;

(n) if the credit union is an amalgamated credit union,

(i) every record, document or instrument described in paragraphs (a) to (d) and (g) to (j),

(ii) every record, document or instrument described in paragraphs (f), (k) and (l), and

(iii) every record, document or instrument described in paragraphs (e) and (m)

of each of the amalgamating credit unions;

(o) if a receiver or receiver manager is appointed under an instrument filed in the office of the registrar, the name and address of the receiver or receiver manager, the date of the appointment of the receiver or receiver manager and the date the receiver or receiver manager ceases to act or completes the duties of that office.

Examination of records

39.43  (1) A director of a credit union may examine and take extracts, without charge, from the credit union's records, documents and instruments referred to in section 39.42, and a former director may examine and take extracts, without charge, from the credit union's records, documents and instruments referred to in section 39.42 that relate to the time when he or she was a director.

(2) A member, auxiliary member or debentureholder of a credit union may examine and take extracts, without charge, from the credit union's records, documents and instruments referred to in section 39.42, except those referred to in paragraphs (f), (k), (l) and (n) (ii).

(3) A person may examine and take extracts from the credit union's records, documents and instruments referred to in section 39.42, except those referred to in paragraphs (f), (k), (l) and (n) (ii), on payment of $0.50 or a lesser sum the credit union prescribes, for each record, document or instrument examined.

(4) The records, documents or instruments may be examined during normal business hours, but, in the case of examination by any person other than a director, the credit union may, by ordinary resolution, impose reasonable restrictions, provided that not less than 2 consecutive normal business hours in each day, Saturday and holidays excepted, are allowed for examination.

Copies

39.44  A person entitled to examine a record, document or instrument of the credit union under section 39.43 is entitled to require the credit union to furnish the person with a copy on payment of a reasonable charge not exceeding the sum of $0.50 for every page copied.

Copy of constitution and rules for member

39.45  A member or auxiliary member of a credit union is entitled on request and without charge to a copy of the constitution and rules.

Form of records

39.46  (1) Records and registers that are required by this Act or the Financial Institutions Act to be prepared and maintained by or on behalf of a credit union may be in a bound or looseleaf form, or entered or recorded by any system of mechanical or electronic data processing, or by any other information storage device from which the credit union is capable of reproducing, in a reasonable time, any required information in intelligible form.

(2) Minutes that are required by this Act or the Financial Institutions Act to be kept by a credit union must be kept in a bound or looseleaf book.

(3) A credit union and its agents must take adequate precautions with respect to the records and registers required by this Act or the Financial Institutions Act to be prepared and maintained so as to

(a) avoid loss, mutilation or destruction,

(b) avoid falsification of entries, and

(c) provide simple, reliable and prompt access.

Division 3 — Accounting Records

Accounting records required

39.47  (1) A credit union must keep proper accounting records in respect of all financial and other transactions of the credit union, and, without limiting the generality of the foregoing, must keep records of

(a) every sum of money received and disbursed by the credit union and the matters in respect of which the receipt and disbursement take place,

(b) every sale and purchase by the credit union,

(c) every asset and liability of the credit union, and

(d) every other transaction affecting the financial position of the credit union.

(2) Without limiting section 133 of the Financial Institutions Act, the accounting records of a credit union must be kept at a place determined by the directors, but the registrar may order that the accounting records be kept in British Columbia.

(3) The accounting records of a credit union must be open to the inspection of any director during the normal business hours of the credit union.

(4) Subject to the rules or an ordinary resolution, the directors may determine to what extent, at which times and places and under what conditions the accounting records of the credit union must be open to the inspection of members or auxiliary members.

Division 4 — Financial Statements

Financial statements for members

39.48  (1) A credit union, not less than 10 days before the date of its annual general meeting, must send a copy of the financial statements referred to in section 74.1 and the auditor's report on the financial statements to the auditor and each member and auxiliary member

(a) by prepaid post to the latest address shown for the recipient on the register of members and auxiliary members, or

(b) if the intended recipient has provided an email address for the purposes of receiving such records, by email to that address.

(2) A credit union, on demand by a debentureholder of the credit union, must furnish the debentureholder with a copy of the credit union's latest financial statements and a copy of the auditor's report on the financial statements.

Approval for publication

39.49  (1) Financial statements, or interim financial statements, issued, published or circulated by a credit union must be first approved by the directors, and the approval evidenced by the signatures of 2 directors.

(2) Financial statements issued, published or circulated by a credit union

(a) that are to be presented to an annual general meeting must have attached the auditor's report required under Part 2.3,

(b) must have attached every auditor's report made in respect of the financial statements, and

(c) must not, unless the financial statements have been audited and an auditor's report has been made, purport to be audited financial statements.

Part 2.3 — Audits

Division 1 — Appointment of Auditor

Auditor

39.5  (1) The directors of a credit union may appoint the first auditor of the credit union to hold office until the close of the first annual general meeting.

(2) The credit union, at each annual general meeting, must appoint an auditor to hold office until the close of the next annual general meeting, and if, at that meeting, an appointment is not made, the auditor in office continues as auditor until a successor is appointed.

(3) The directors may fill any casual vacancy in the office of auditor.

(4) If for any reason no auditor is appointed, on the application of a member, auxiliary member, debentureholder or creditor of the credit union, the Supreme Court may appoint an auditor to hold office until the close of the next annual general meeting and set the remuneration to be paid by the credit union for the auditor's services.

(5) The credit union must promptly give notice in writing to an auditor of the auditor's appointment.

Qualifications

39.51  The auditor of a credit union must be

(a) a person who is a member of, or a partnership whose partners are members of, a provincial or territorial institute or ordre of chartered accountants, or a provincial or territorial organization of chartered professional accountants, within Canada, or

(b) a person who is certified under section 222 of the Business Corporations Act by the Auditor Certification Board continued under section 221 of that Act.

Persons not qualified as auditors

39.52  (1) A person must not be the auditor of a credit union if the person is not independent of the credit union, its affiliates and its directors and officers.

(2) For the purposes of this section, independence is a question of fact, but

(a) a person is not independent who is a director, officer or employee of the credit union or of an affiliate of the credit union, or who is a partner, employer or employee of that director, officer or employee, or who is a member of the immediate family of that director or officer,

(b) a person is not independent if the person, a member of the person's immediate family, the person's partner, or a member of the immediate family of the person's partner, beneficially owns or controls, directly or indirectly, any interest in an equity share or a debt obligation of the credit union or of any of the credit union's affiliates, and

(c) a person is not independent who is appointed a trustee of the estate of the credit union under the Bankruptcy and Insolvency Act (Canada) or who is a partner, employer or employee of, or a member of the immediate family of, that trustee.

(3) For the purposes of subsection (2),

(a) the immediate family of the person referred to includes

(i) his or her spouse, parent and child, and

(ii) any relative of the person, or his or her spouse, who resides with the person, and

(b) a partner of the person referred to means any person with whom the person carries on in partnership the profession of public accounting.

(4) An auditor, within 90 days after becoming aware that the auditor's appointment as auditor contravenes this section, must either

(a) eliminate the circumstances that cause the auditor to be in contravention, or

(b) resign as auditor.

(5) If an auditor contravenes this section, any interested party may apply to the Supreme Court, whether or not the period referred to in subsection (4) has expired, for an order that the auditor be removed on terms and conditions the court considers appropriate.

Remuneration

39.53  The remuneration of the auditor of a credit union must be set by ordinary resolution or, if the credit union so resolves, by the directors, but the remuneration of an auditor appointed before the first annual general meeting or to fill any casual vacancy may be set by the directors.

Removal of auditor

39.54  (1) A credit union may, by ordinary resolution passed at a general meeting duly called for the purpose, remove an auditor before the expiration of the auditor's term of office, and must by ordinary resolution at that meeting appoint another auditor in the auditor's stead for the remainder of the auditor's term.

(2) A credit union, before calling a general meeting for the purpose specified in subsection (1), but not less than 14 days before the mailing of the notice of the meeting, must give to the auditor

(a) written notice of the intention to call the meeting, specifying the date on which the notice of the meeting is proposed to be mailed, and

(b) a copy of all material proposed to be sent to members in connection with the meeting.

(3) An auditor has the right to make to the credit union, not less than 3 days before the mailing of the notice of the meeting, representations in writing respecting the auditor's proposed removal as auditor, and the credit union, at the credit union's expense, must forward with the notice of the meeting a copy of those representations to each member.

Notice of proposed change

39.55  (1) The directors of a credit union must not propose, at an annual general meeting, the appointment of an auditor other than the incumbent auditor unless notice of that proposed appointment is contained in the notice of the meeting.

(2) If the notice of the meeting contains the notice referred to in subsection (1),

(a) the credit union must, not less than 14 days before the mailing of the notice of the meeting, give to the incumbent auditor written notice of the intention of the directors not to recommend the auditor's reappointment at the annual general meeting, specifying in the written notice the date on which the notice of the meeting is proposed to be mailed, and

(b) the incumbent auditor has the right to make to the credit union, not less than 3 days before the mailing of the notice of the meeting, representations in writing respecting the proposal not to reappoint the incumbent as auditor, and the credit union, at the credit union's expense, must forward with the notice of the meeting a copy of those representations to each member.

Division 2 — Audit Committee

Appointment and procedures

39.56  (1) The directors of a credit union must elect at their first meeting following each annual general meeting a committee, to be known as the audit committee, composed of not fewer than 3 directors, of which a majority of the members must not be officers or employees of the credit union or of an affiliate of the credit union, to hold office until the next annual general meeting.

(2) The members of the audit committee must elect a chair from among themselves and, subject to section 103 of the Financial Institutions Act, may determine the committee's procedure.

(3) In addition to the requirements of subsection (5), the audit committee of a credit union must review

(a) returns of the credit union that are to be filed with the superintendent under section 127 (1) of the Financial Institutions Act,

(b) reports that have been made by the auditor under section 123 of the Financial Institutions Act, and

(c) prescribed reports, transactions or matters.

(4) If, under this Act or the Financial Institutions Act, financial statements or a return requires the approval of the directors, that approval must not be given until

(a) the audit committee has reviewed and reported on those financial statements or that return, and

(b) the directors have received the report.

(5) Before financial statements that are to be submitted to an annual general meeting are considered by the directors, the financial statements must be submitted to the audit committee for review with the auditor, and, after that, the report of the audit committee on the financial statements must be submitted to the directors.

(6) The auditor must be given notice of, and has the right to appear before and to be heard at, every meeting of the audit committee, and must appear before the audit committee when requested to do so by the committee.

(7) On the written request of the auditor, of a member of the audit committee or of any director, the chair of the audit committee must convene a meeting of the audit committee to consider any matters the auditor, member or director, as the case may be, believes should be brought to the attention of the directors or members.

Division 3 — Duties and Rights of Auditors

Annual audit

39.57  (1) The auditor must make an examination that will enable the auditor to report to the members as required under subsection (2).

(2) The auditor must make a report to the members on the financial statements, other than the part that relates to the period referred to in section 74.1 (a) (ii), that are to be placed before the credit union at any annual general meeting during the auditor's term of office, and must state in the report whether, in the auditor's opinion,

(a) the financial statements present fairly the financial position of the credit union and the results of its operations for the period under review, and

(b) the financial statements are in accordance with generally accepted accounting principles applied on a basis consistent with that of the preceding period.

(3) If the financial statements contain a statement of changes in net assets or a statement of source and application of funds, the auditor must state in the auditor's report whether, in the auditor's opinion, the statement of changes in net assets or the statement of source and application of funds presents fairly that information.

Negative audit report

39.58  If the report of the auditor under section 39.57 does not contain the unqualified opinion required by it, the auditor must state the reasons in the report.

Audited statements of subsidiaries

39.59  Whether or not the assets and liabilities and income and expense of any one or more subsidiaries of a holding credit union are included in the financial statements of the holding credit union, the report of the auditor of the holding credit union required by this Part may refer to the reports of the auditors of one or more of the subsidiaries, but the reference does not derogate from the duty of the auditor of the holding credit union to comply with section 39.57 (1).

Auditor's attendance

39.6  A member of a credit union may, whether or not entitled to vote at a meeting of the credit union, by notice in writing to the credit union given not less than 5 days before a meeting at which the financial statements of the credit union are to be considered or the auditor is to be appointed or removed, require the attendance of the auditor at the meeting at the expense of the credit union and, in that event, the auditor must attend the meeting.

Procedure

39.61  (1) At any general meeting, the auditor, if present, must answer inquiries directed to the auditor concerning the financial statements of the credit union and the opinion on the financial statements stated in the auditor's report.

(2) At the request of any member attending the annual general meeting, the report of the auditor must be read to the meeting.

Amendment of financial statements and report

39.62  (1) If facts come to the attention of the officers or directors of a credit union

(a) that could reasonably have been determined before the date of the last annual general meeting, and

(b) that, if known before the date of the last annual general meeting, would have required a material adjustment to the financial statements presented to the meeting,

the officers or directors must communicate the facts to the auditor who reported to the members under this Part and the directors must promptly amend the financial statements and deliver the financial statements to the auditor and to the superintendent.

(2) Whether through communication described in subsection (1) or by any other means, if facts described in subsection (1) (a) and (b) come to the attention of the auditor and the auditor considers it necessary to amend the report in respect of the financial statements presented to the last annual general meeting, the auditor must

(a) inform the superintendent in writing, and

(b) amend the report so that it complies with this Part.

(3) If the auditor amends the report under subsection (2), the directors must send to the members a copy of the amended report and a statement explaining the effect of the amendment on the financial position and results of the operations of the credit union

(a) by prepaid post to the latest address shown for the recipient on the register of members and auxiliary members, or

(b) if the intended recipient has provided an email address for the purposes of receiving such records, by email to that address.

Access to information

39.63  (1) On the demand of an auditor of a credit union, a person who is or has been a director, officer, employee or agent of a credit union or a credit union's subsidiary must, to the best of the person's ability to do so,

(a) furnish all information and explanations to the auditor, and

(b) allow the auditor access to, and furnish to the auditor copies of, records, documents, books, accounts and vouchers of the credit union and of the credit union's subsidiaries, if any,

as the auditor considers necessary for the purpose of any examination or report that the auditor is permitted or required to make under this Act or the Financial Institutions Act.

(2) A person who in good faith makes any communication under this section is not liable in a civil action only because of making the communication.

Information as to foreign subsidiaries

39.64  If a subsidiary referred to in section 39.63 is a corporation to which this Act does not apply, the holding credit union must make available to the auditor of the holding credit union the records, documents, instruments, accounts and vouchers of that subsidiary and must require the directors, officers and employees of that subsidiary to make available to the auditor of the holding credit union the information and explanations referred to in section 39.63.

Right to attend general meetings

39.65  The auditor of a credit union is entitled to attend any general meeting of the credit union and to receive every notice and other communication relating to the meeting that a member or auxiliary member is entitled to receive, and is entitled to be heard at any general meeting that the auditor attends on any part of the business of the meeting that concerns the auditor in that capacity, or that concerns the financial statements of the credit union.

Qualified privilege

39.66  An oral or written statement or report made under this Act by the auditor or former auditor of a credit union has qualified privilege.

Part 2.4 — Alteration of Constitution and Rules

Definition

39.7  In this Part, "alter" includes create, add to, vary and delete.

Commission's consent

39.71  The registrar must not accept for filing

(a) a resolution, referred to in section 39.72 (2), to alter the constitution of a credit union, or

(b) a resolution, referred to in section 39.74 (1), to alter the rules of a credit union

without first receiving the consent of the commission.

Powers to alter constitution

39.72  (1) If there is an express provision in this Act permitting a credit union to alter the credit union's constitution, the constitution may be altered in the cases and to the extent permitted by that provision, so long as the altered constitution complies with this Act.

(2) A credit union that wishes to alter its constitution as permitted by subsection (1) must file a certified copy of the resolution altering the constitution, together with a copy of the constitution as amended by the alteration.

(3) A resolution to alter the constitution of a credit union takes effect

(a) if every other requirement of this Act relating to the proposed alteration is complied with, on the date that a certified copy has been accepted for filing by the registrar, or

(b) on the date specified in the resolution,

whichever is later.

Copies to include alterations

39.73  If the constitution of a credit union is altered, every copy of the constitution issued on or after the date the alteration takes effect must contain the alteration.

Powers to alter rules

39.74  (1) Subject to this Act and a credit union's constitution, the credit union may, if the rules as altered would, at the time of the filing, comply with this Act, alter the credit union's rules by filing with the registrar a certified copy of a special resolution altering the rules.

(2) A resolution to alter the rules of a credit union takes effect

(a) if every other requirement of this Act relating to the proposed alteration is complied with, on the date that a certified copy has been accepted for filing by the registrar, or

(b) on the date specified in the resolution,

whichever is later.

(3) An alteration made in compliance with subsections (1) and (2) is as valid as if originally contained in the rules.

Copies to include alterations

39.75  If the rules of a credit union are altered, every copy of the rules issued on or after the date the alteration takes effect must contain the alteration.

Altering restrictions

39.76  A credit union may, by special resolution, alter its constitution by altering any restriction on the business carried on or to be carried on by the credit union, or on its powers.

Procedure and effect

39.77  (1) A credit union, by special resolution, may alter its constitution by changing the credit union's name to a name approved by the superintendent.

(2) On the registrar accepting for filing a certified copy of the resolution referred to in subsection (1), the registrar must issue a certificate showing the change of name and the date the change of name is effective and must publish in the Gazette or in any other prescribed manner notice of change of name.

(3) No change of the name of a credit union affects any of the credit union's rights or obligations, or renders defective any legal proceedings by or against it, and any legal proceedings that may have been continued or commenced against the credit union under its former name may be continued or commenced against the credit union under its new name.

Part 3 — Membership, Shares and Voting

Division 1 — Membership

Common bond

40  (1) A credit union must have a common bond of membership based on only one of the following: religious interest; ethnic interest; social interest; occupation; employment; community; geographic area.

(2) Subject to first receiving written approval of the commission and subject also to continued compliance with subsection (1), a credit union may amend its common bond of membership by special resolution.

(3) For the purpose of accommodating an amalgamation under section 20 or 21, or a sale and purchase of assets under section 16 or 17, despite subsection (1) but subject to first receiving the written approval of the commission, a credit union may

(a) have for its common bond of membership more than one basis set out in subsection (1), and

(b) by special resolution amend its common bond of membership for that purpose.

(4) A credit union must file with the registrar every special resolution amending its common bond of membership.

Membership qualifications

41  (1) A credit union may admit as a member only those persons who are eligible under subsection (2), (3), (4), (5) or (6).

(2) A person who meets all of the following requirements is eligible to be a member of a credit union:

(a) the person is one of a group that the credit union under its common bond of membership is intended to serve;

(b) the person applies for membership and the application is approved by the directors, a committee of the directors or a nominee of the directors;

(c) the person subscribes and pays for at least the minimum number of membership shares required under the rules of the credit union.

(3) If a person is one of a group that a credit union under its common bond of membership is intended to serve

(a) that person's spouse, parent or child, or

(b) that person's

(i) relative, or

(ii) spouse's relative

who occupies the same home as that person

is eligible to be a member of the credit union, subject to meeting the requirements set out in subsection (2) (b) and (c).

(4) If the directors of a credit union consider that a person may be conveniently served by it, the person is eligible to be a member of the credit union, subject to meeting the requirements set out in subsection (2) (b) and (c).

(5) An employee of a credit union is eligible to be a member of the credit union, subject to any restrictions on employee membership under the rules and subject to meeting the requirements set out in subsection (2) (b) and (c).

(6) Each of the following is eligible to be a member of a credit union, if it meets the requirements set out in subsection (2) (b) and (c):

(a) the government;

(b) a public body;

(c) a subsidiary of the credit union.

Junior members

42  (1) Despite section 41, an individual under 19 years of age who meets the requirements of section 41 (2), (3), (4) or (5) may be admitted only as a junior member of the credit union.

(2) Despite the Infants Act, the Age of Majority Act or the common law, but subject to subsection (3), in respect of membership in the credit union and of any indebtedness or obligation to the credit union, a junior member of a credit union

(a) has the same obligations, rights and legal capacity as a member of the credit union who has reached 19 years of age, and

(b) may be sued.

(3) A junior member is not entitled to vote, be a director or be a member of a committee of the credit union.

(4) A junior member becomes a member with full membership rights and obligations on reaching 19 years of age.

Ceasing to be a member

43  A member of a credit union does not cease to be a member except as provided in sections 45, 47, 48 and 49.

Membership shares

44  (1) The rules of a credit union must provide, as a condition of admission as a member of the credit union, that each member subscribe and pay for a specified minimum number, not less than 5, of shares of a distinct class of equity shares having a par value of $1 for each share.

(2) If the rules of a credit union provide as set out in subsection (1), the shares of the distinct class of equity shares referred to in that subsection are the membership shares in the credit union.

(3) If the rules of a credit union do not provide as set out in subsection (1), the rules of the credit union are deemed to be amended to contain the following:

"A distinct class of equity shares of the credit union is established consisting of an unlimited number of equity shares having a par value of $1 each. As a condition of admission as a member or as a junior member a person is required to subscribe and pay for at least 5 membership shares."

and the shares of that distinct class of equity shares are the membership shares in that credit union.

(4) The membership shares in a credit union are redeemable as set out in section 64 (6) to (8).

(5) A membership share in a credit union

(a) must not be beneficially owned by, and

(b) is not assignable to

a person who is not a member of the credit union.

(6) A credit union must not

(a) issue its membership shares, or

(b) enter in its register of members and auxiliary members a transfer of membership shares

to any person who

(c) is not a member of the credit union, or

(d) will not become a member on the issue or transfer of the shares.

(7) A member of a credit union may not subscribe and pay for more than the maximum number of membership shares in the credit union specified in the rules of the credit union, which maximum number must be not greater than 1 000, and if in the rules of a credit union no such maximum number is specified, a member may not subscribe and pay for more than 1 000 membership shares in that credit union.

(8) A credit union must not attach rights or restrictions to its membership shares under its rules unless the rights or restrictions

(a) are consistent with the requirements of this section, and

(b) have first received the consent of the commission.

(9) If there is a conflict between this section and the constitution or rules of a credit union respecting membership shares, this section prevails.

(10) To the extent that rights or restrictions attached to membership shares in a credit union under the rules of the credit union are inconsistent with this section, the rules are ineffective and the rights or restrictions are unenforceable.

Membership ceases for failure to hold membership shares

45  (1) It is a condition of membership in every credit union that each member hold at least the minimum number of membership shares specified under the rules of the credit union.

(2) A member of a credit union who ceases to hold at least the minimum number of membership shares specified under the rules of the credit union immediately ceases to be a member of the credit union.

Auxiliary membership

46  (1) A person who holds equity shares in a credit union but is not a member of it is an auxiliary member of the credit union.

(2) A person who holds shares of any class of equity shares of a credit union, other than membership shares, becomes an auxiliary member of the credit union immediately on ceasing to be a member of the credit union

(a) under section 45 (2),

(b) on withdrawal from membership under section 47, or

(c) on termination of membership under section 48 or 49.

Withdrawal from membership

47  A member may withdraw from membership in a credit union by giving written notice of withdrawal to the credit union.

Termination of membership

48  (1) In this section, "stabilization authority" means the central credit union designated as the stabilization authority under section 282 of the Financial Institutions Act.

(2) The only way by which the directors of a credit union, other than the stabilization authority, may terminate a person's membership in the credit union is by resolution of the directors,

(a) requiring a majority of 3/4 of all the directors, and

(b) passed at a meeting of the directors.

(3) The only way by which the directors of the stabilization authority may terminate a person's membership in the stabilization authority is by resolution of the directors,

(a) requiring approval by all the directors, and

(b) passed at a meeting of the directors.

(4) A person whose membership is proposed to be terminated by a resolution of the directors is entitled to at least 7 days' notice of the meeting at which the resolution is to be considered, together with a statement of the grounds for termination, and the person may appear, either personally or by or with an agent or counsel, to make submissions at the meeting.

(5) Within 7 days after the date on which the resolution referred to in subsection (2) or (3) is passed by the required majority, the credit union must give written notice of the resolution to the person whose membership is terminated.

(6) A person whose membership is terminated under subsection (2) or (3) may appeal the decision of the directors at the next general meeting of the credit union by delivering a written notice of appeal to the credit union within 7 days after receiving notice under subsection (5).

(7) A person who, within the time limited by subsection (6), appeals the termination of the person's membership, despite the resolution of the directors terminating the membership, continues to be a member of the credit union unless the members at the general meeting to which the appeal is brought confirm the termination of the person's membership by a resolution requiring a simple majority or, if provided by the rules, a greater majority.

Termination of membership by special resolution

49  The only way by which the members of a credit union may terminate a person's membership in the credit union is by special resolution, passed at a general meeting at which the person is given an opportunity to be heard.

Readmission requires special resolution

50  A person whose membership has been terminated in accordance with section 48 or 49 must not again be admitted to membership in the credit union unless the readmission is approved by special resolution.

Restrictions respecting auxiliary membership

51  Subject to sections 16 (4) (b) (ii), 20 (4) (b) (ii) and 58, an auxiliary member of a credit union is not entitled to vote, be a director or be a member of a committee of the credit union.

Entitlement to refund

52  (1) If a person ceases to be a member of a credit union

(a) under section 45 (2),

(b) on withdrawal from membership under section 47, or

(c) on termination of membership under section 48 or 49,

then, subject to section 64 (6), (7) and (8) and to subsection (2) of this section, the credit union

(d) must redeem or purchase at par value any membership shares held by that person and pay that person any declared but unpaid dividends on those shares,

(e) must pay that person the amount paid up on that person's non-equity shares, if any, and any declared but unpaid dividends on those non-equity shares, and

(f) subject to completion of the term of any term deposit, must pay that person any amount that person has on deposit in the credit union and any accrued interest on that money.

(2) A credit union may apply an amount due by it under subsection (1) (e) or (f) in satisfaction of indebtedness owed to the credit union by the person to whom the amount is due, and then the credit union must pay any balance to the person.

(3) A credit union must not exercise its right under subsection (2) in respect of jointly held non-equity shares or deposits, or interest or dividends on them,

(a) except with the consent of each of the joint holders, or

(b) unless each of the joint holders is indebted to the credit union.

Loss of office

53  On ceasing to be a member of a credit union, a person ceases to hold any position as a director or member of a committee of the credit union.

Register of members and auxiliary members

54  (1) A credit union must keep all of the following:

(a) a record showing the name and address of each member and auxiliary member;

(b) the date on which each person was entered in the register as a member or auxiliary member and whether any equity shares of the member or auxiliary member were acquired by allotment, transfer, conversion, exchange or otherwise, and, if by transfer, from whom;

(c) the date on which a person ceased to be a member or auxiliary member;

(d) the kind and class of shares held by each member or auxiliary member, the par value, if any, of the shares and, in the case of partly paid shares, the amount paid or agreed to be considered as paid on each share;

(e) identifying particulars of the share certificates issued for the shares held by each member or auxiliary member.

(2) The record required to be kept under subsection (1) (a) constitutes the register of members and auxiliary members and their addresses for the purpose of giving notice and for other purposes as may be required by the rules of the credit union.

Division 2 — Shares

Shares

55  (1) Subject to its constitution and rules, a credit union may issue an unlimited number of shares.

(2) In its constitution or rules, a credit union may provide for one or more classes of shares, with or without par value, with differing rights and restrictions among classes.

(3) A credit union must not allot or issue fractional shares.

Kinds of shares

55.1  (1) The authorized capital of a credit union consists of shares with par value, or shares without par value, or both kinds of shares.

(2) The authorized capital must be described in the constitution, which must state the aggregate number of shares that the credit union may issue and,

(a) if the shares are of one kind only, the par value of each share or a statement that the shares are without par value, or

(b) if the shares are of both kinds, the number of shares of each kind, the par value of each share having par value and a statement that the other kind of shares are without par value.

(3) If shares in a credit union are of both kinds of shares, the shares with par value must be a class or classes of shares distinct from the shares without par value.

(4) Every share without par value must be equal to every other share without par value, subject to special rights or restrictions attached to any such share under the constitution or rules or under this Act.

(5) The par value of shares must be expressed in Canadian currency.

(6) A share in a credit union is personal estate.

Price or consideration for shares

55.2  (1) Subject to section 55.5, no equity shares with par value may be allotted or issued except at a price or for a consideration at least equal to the product of the number of equity shares allotted or issued multiplied by their par value.

(2) No equity shares without par value may be allotted or issued at a price or for a consideration less than,

(a) if the constitution or rules authorize the directors to determine the price or consideration, the price or consideration determined by the directors, or

(b) if there is no provision in the constitution or rules as mentioned in paragraph (a), the price or consideration determined by special resolution,

and the capital of the credit union is, with respect to those shares, an amount equal to at least the aggregate amount of the price or consideration paid to the credit union on or for those equity shares that are issued, together with amounts that may be added to that capital by ordinary resolution.

(3) Even if the price or consideration for an equity share may be other than cash, the price or consideration for an equity share may, at the time when the equity share is allotted, be expressed in terms of money and so recorded in the proceedings of the directors of the credit union.

Shares to be fully paid

55.3  (1) No equity share may be issued until it is fully paid.

(2) An equity share is not fully paid until the credit union has received the full consideration for the equity share in cash, property or services.

(3) For the purposes of subsection (2),

(a) a document evidencing indebtedness of the allottee does not constitute property,

(b) services are past services actually performed for the credit union,

(c) the value of property or services is an amount set by resolution of the directors that is, in all circumstances of the transaction, no greater than fair market value, and

(d) the full consideration received for an equity share issued by way of dividend is the amount declared by the directors to be the amount of the dividend.

Liability of directors

55.4  Every director is jointly and severally liable to compensate the credit union and any equity shareholder for any loss, damage and costs sustained by the credit union or the equity shareholder by reason of the allotment or issue of an equity share in contravention of section 55.2 or 55.3.

Commissions and discounts

55.5  (1) A credit union, if authorized by its constitution or rules, may pay a commission or allow a discount to a person in consideration of the person subscribing or agreeing to subscribe, or procuring or agreeing to procure subscriptions, whether absolutely or conditionally, for the credit union's shares, but the commission and discount in the aggregate must not exceed 25% of the subscription price.

(2) Subject to subsection (1), a credit union must not apply any of its equity shares or capital money, either directly or indirectly, in payment of a commission, discount or allowance to a person in consideration of the person subscribing or agreeing to subscribe, or procuring or agreeing to procure subscriptions, whether absolutely or conditionally, for equity shares in the credit union.

Creation of special rights and restrictions

56  Subject to sections 58 and 59, a credit union may alter its constitution or rules by special resolution in order to create, define and attach special rights or restrictions to equity shares of any class in the credit union, whether those shares are issued or unissued.

Alteration or abrogation

57  Subject to sections 58 and 59 and otherwise complying with the rules, a credit union may alter its constitution or rules by special resolution in order to alter or abrogate any special rights or restrictions attached to equity shares of any class in the credit union, whether those shares are issued or unissued.

No interference with class rights without consent

58  (1) Rights or special rights attached to issued equity shares of any class in a credit union must not be prejudiced or interfered with under this Act, except as provided in section 44 (3) or in the constitution and rules, unless the holders of that class of equity shares so approve by a separate resolution requiring a majority of 2/3 of the votes cast.

(2) A credit union may provide in its rules that, for the purpose of a separate resolution under subsection (1) of the holders of a class of equity shares, each holder of equity shares in the class of equity shares in relation to which the vote is being held has one vote in respect of each equity share of that class of equity shares held by that holder.

Dissenter's right to apply to Supreme Court

59  (1) Members or auxiliary members of a credit union,

(a) being not fewer than 10% of the members entitled to vote who did vote against the special resolution referred to in section 56 or 57,

(b) if the credit union's rules do not provide as set out in section 58 (2), being not fewer than 10% of the members and auxiliary members holding equity shares of a class of equity shares of the credit union whose special rights or restrictions are affected by a special resolution altering or abrogating special rights or restrictions attaching to that class of equity shares, or

(c) if the credit union's rules do provide as set out in section 58 (2), being the holders of not less than 10% of the equity shares of a class of equity shares of the credit union whose special rights or restrictions are affected by a special resolution altering or abrogating special rights or restrictions attaching to that class of equity shares,

not more than 14 days after the passing of

(d) the special resolution referred to in section 56 or 57, or

(e) the separate resolution referred to in section 58,

whichever is the later, may apply to the Supreme Court to set aside the special resolution referred to in section 56 or 57 or the separate resolution referred to in section 58.

(2) The Supreme Court must not hear an application under subsection (1) unless

(a) notice has been served on the credit union, and

(b) an affidavit of that service exhibiting the notice has been served on the registrar and on the superintendent

not later than 14 days after the passing of the later resolution.

(3) The Supreme Court may direct that notice of the application under subsection (1) be served on any other person.

(4) On an application under subsection (1), the Supreme Court may

(a) set aside the special resolution and require a copy of the order setting it aside to be filed with the registrar and the superintendent,

(b) affirm the special resolution subject to terms the Supreme Court considers appropriate, or

(c) affirm the special resolution and require the credit union, subject to section 64 (8), or any other person to purchase the equity shares of any member or auxiliary member at a price and on the terms to be determined by the Supreme Court,

and, in any case, the Supreme Court may make consequential orders, including any order as to costs, and may give directions it considers appropriate.

Entitlement to share certificate

60  (1) A credit union must issue share certificates evidencing equity shares other than membership shares.

(2) Within one month after allotment of equity shares other than membership shares, a credit union must issue and deliver, without charge to each person who after September 15, 1990 subscribes and pays for the equity shares, a share certificate for them.

(3) A share certificate issued by a credit union for equity shares must conspicuously state the following on its face:

"NOT GUARANTEED BY THE CREDIT UNION DEPOSIT INSURANCE CORPORATION".

(4) In respect of equity shares issued before September 15, 1990, for which no share certificates have been issued, the credit union, on each accounting of those equity shares, must disclose in writing to each member or auxiliary member who holds equity shares that

(a) money invested in equity shares is not guaranteed by the deposit insurance corporation, and

(b) on written application to the credit union, the member or auxiliary member is entitled without charge to a share certificate for the equity shares other than membership shares held by the member or auxiliary member.

Particulars of issue on share certificates

61  (1) If a credit union has more than one class of equity shares, the credit union must ensure that

(a) the full text of the special rights or restrictions attached to any class of equity shares is contained in or attached to each share certificate representing that class, or

(b) each share certificate representing any class of equity shares has a statement on it indicating that

(i) there are special rights or restrictions attached to that class, and

(ii) a free copy of the full text of the special rights or restrictions may be obtained at the records office of the credit union.

(2) A credit union must

(a) keep at its records office a copy of the full text of the special rights or restrictions attached to any class of equity shares, and

(b) provide a free copy of that text to any person who requests one.

Certificate as evidence of title

61.1  A share certificate issued by the credit union and signed as required by section 61.2 evidencing equity shares held by an equity shareholder is proof in the absence of evidence to the contrary of the title of the equity shareholder to the shares.

Signature on certificate

61.2  A share certificate of a credit union must be signed manually by at least one officer or director of the credit union, or by or on behalf of a registrar, branch registrar, transfer agent or branch transfer agent of the credit union, and any additional signatures may be printed or otherwise mechanically reproduced and, in that event, a certificate so signed is as valid as if signed manually.

Lost or destroyed certificates

61.3  Section 92 of the Securities Transfer Act applies to lost or destroyed certificates.

Liability of equity shareholders

61.4  (1) The liability of an equity shareholder for an equity share held by the equity shareholder is limited,

(a) in the case of an equity share with par value, to the amount unpaid on the equity share, and

(b) in the case of an equity share without par value, to the amount unpaid on the equity share of the price or consideration for which that equity share was issued by the credit union,

but an equity shareholder is not personally liable for more than the amount actually agreed to be paid for an equity share held by the equity shareholder.

(2) Money payable by an equity shareholder to the credit union under the constitution or rules is a debt due from the equity shareholder to the credit union of the nature of a specialty debt.

(3) No equity shareholder of a credit union is personally liable for the debts, obligations or acts of the credit union.

Powers of personal representative

61.5  (1) Despite the constitution or rules of a credit union, the personal or other legal representative or trustee in bankruptcy of an equity shareholder, although not registered as a member or auxiliary member, has the rights, privileges and obligations that attach to the equity shares held by the equity shareholder if the appropriate evidence of appointment or incumbency within the meaning of section 87 of the Securities Transfer Act is provided to the credit union.

(2) Subsection (1) of this section does not apply on the death of an equity shareholder for equity shares registered in the equity shareholder's name and the name of another person in joint tenancy.

Documents for transmission

61.6  If a person applies to a credit union or the credit union's transfer agent to effect a transmission of shares or other securities, the person must produce the following:

(a) a declaration of transmission made by a personal or other legal representative or trustee in bankruptcy stating the particulars of the transmission;

(b) the share certificate or security registered in the name of the deceased or bankrupt, and any assurances referred to in section 87 of the Securities Transfer Act that are required by the credit union;

(c) in the case of a death,

(i) the original or a court certified copy of the grant of probate or grant of administration, or

(ii) the original or a court certified or authenticated copy of the grant of representation, will, order or other instrument or other evidence of the death under which title to the shares or securities is claimed to vest;

(d) in the case of bankruptcy, a copy of the court order or of the assignment in bankruptcy and a copy of the instrument appointing the trustee in bankruptcy;

(e) in any other case,

(i) if the person making the declaration of transmission referred to in paragraph (a) was appointed by a court, appropriate evidence of appointment or incumbency within the meaning of paragraph (a) of the definition of "appropriate evidence of appointment or incumbency" in section 87 (3) of the Securities Transfer Act, and

(ii) if that person was not appointed by a court, appropriate evidence of appointment or incumbency within the meaning of paragraph (b) of the definition of "appropriate evidence of appointment or incumbency" in section 87 (3) of the Securities Transfer Act.

Effect of documents provided

61.7  If a personal or other legal representative, or a trustee in bankruptcy, of an equity shareholder of a credit union applies to the credit union or the credit union's transfer agent under section 61.6 to become or to designate another person to become a registered member or auxiliary member of the credit union, provision to the credit union or transfer agent of the records required under that section for the application is, despite the constitution or rules, sufficient authority to enable the credit union or transfer agent to register the applicant or the person designated by the applicant, as the case may be, as a registered member or auxiliary member of the credit union.

Security issue preconditions

62  (1) Nothing in this section or section 66 limits the application of the Securities Act or the Real Estate Development Marketing Act.

(2) Subject to subsection (3), a credit union must not issue equity shares or other security instruments until at least 14 days after it has filed with the superintendent

(a) a disclosure statement that is in the prescribed form and that complies with subsection (4), and

(b) any other type of document that is prescribed.

(3) Subsection (2) does not apply

(a) in respect of the membership shares of a credit union, or

(b) in circumstances or on conditions that may be prescribed in respect of

(i) a prescribed type of equity share that is not a membership share, or

(ii) a prescribed type of other security instrument

issued by credit unions generally or by a particular credit union.

(4) A disclosure statement required under subsection (2) must

(a) provide full, true and plain disclosure of all material facts relating to the equity shares or other security instruments to be issued,

(b) comply as to form and content with the requirements of this Act and the regulations, and

(c) have printed or stamped in conspicuous type on its outside front cover the following words:

"Neither the Superintendent of Financial Institutions nor any other authority of the government of the Province of British Columbia has in any way passed on the merits of the matters dealt with in this disclosure statement."

(5) If there is a material change in the facts set out in a disclosure statement required under subsection (2), the credit union, within 30 days after that change, must file with the superintendent a statement of material change describing that change.

(6) A credit union may file, and if ordered to do so by the superintendent must file, with the superintendent a revised disclosure statement

(a) describing every material change since the filing of the disclosure statement, and

(b) replacing any previous statement of material change since that filing.

(7) A copy of a disclosure statement filed under subsection (2), together with any relevant statement of material change, must be open to inspection by any person during normal business hours at the records office of the credit union.

Disclosure to person acquiring securities

63  Before an equity share or other security instrument, for which a disclosure statement under section 62 (2) is required, is issued to a person acquiring the equity share or security instrument from the credit union, and before that person has become obliged to acquire the equity share or security instrument, the credit union must deliver to that person a true copy of the disclosure statement and any relevant statement of material change.

Transfer, redemption and purchase of shares

64  (1) This section does not apply to a central credit union.

(1.1) The Securities Transfer Act does not apply to the transfer of membership shares of a credit union.

(2) Subject to section 44 (5) to (7), a membership share in a credit union is transferable in accordance with the rules of the credit union.

(3) A transfer of membership shares is effective only on registration of the transfer by the credit union.

(4) Subject to subsections (7) and (8) and the rules of the credit union, a credit union by resolution of its directors may redeem or purchase any of its issued equity shares.

(5) A redemption or purchase of membership shares that is required by section 52 (1) (d) must be carried out in accordance with section 52, despite the rules of the credit union, and without the necessity of a resolution of the directors.

(6) If a credit union redeems or purchases a person's equity shares, the credit union may apply the amount due by it on redemption or purchase, including declared but unpaid dividends on those equity shares, in satisfaction of indebtedness owed to the credit union by the person, and then the credit union must pay any balance to the person.

(7) A credit union must not exercise its right under subsection (6) in respect of jointly held equity shares or dividends on them

(a) except with the consent of each of the joint holders, or

(b) unless each of the joint holders is indebted to the credit union.

(8) Without first receiving the written approval of the commission, a credit union must not redeem or purchase or otherwise acquire equity shares issued by the credit union if the redemption, purchase or other acquisition would reduce the credit union's capital base to an amount less than the amount that constitutes an adequate capital base for that credit union in accordance with the regulations under section 289 (3) (f) of the Financial Institutions Act.

Dividends on shares

65  (1) Subject to subsection (3), the directors of a credit union may declare dividends on any class of shares, and, if they do so, the credit union must pay the dividends as declared.

(2) The discretion to declare dividends under subsection (1) on equity shares includes the discretion to declare dividends by way of the issue by the credit union of fully paid equity shares of the same class as those on which the dividends are declared.

(3) A credit union must not declare or pay dividends on any class of equity shares

(a) except in proportion to the amount paid up on the shares, and

(b) subject to subsection (4), if the payment of the dividend would reduce the credit union's capital base to an amount less than the amount that constitutes an adequate capital base for that credit union in accordance with the regulations under section 289 (3) (f) of the Financial Institutions Act.

(4) On application by a credit union made in respect of a proposed declaration and payment of dividends, the commission may order that, in respect of the proposed declaration and payment of dividends, the credit union is exempt from compliance with subsection (3) (b).

Discharge of credit union

66  In the absence of written notice to the credit union to the contrary

(a) from a member, auxiliary member or depositor, as the case may be, or

(b) from a joint owner of a member's, auxiliary member's or depositor's share or deposit, or from the survivor of 2 or more joint owners,

payment by the credit union, to or to the order of the member, auxiliary member, depositor, joint owner or survivor, of money invested in shares or on deposit, discharges the credit union from any further liability, and the credit union is not obliged to see to the application of money so paid.

Shares in trust

67  Unless the instrument of trust permits, shares of and deposits with a credit union held by a trustee in trust for a named beneficiary, or otherwise, must not be charged to secure a loan or obligation.

Financial assistance for equity shares

68  A credit union must not knowingly give financial assistance to a member or auxiliary member directly or indirectly by way of loan, guarantee or the provision of security, or otherwise, for the purpose of

(a) a purchase of, or a subscription made or to be made by that member or auxiliary member for, or the acquisition of any right which may be converted to, equity shares of the credit union, or

(b) the acquisition of any debt obligations of the credit union with a right of conversion into or exchange for equity shares of the credit union.

Patronage allocations

69  (1) Subject to subsection (2), a credit union may pay an allocation to a person

(a) in respect of the person's borrowing from the credit union in the year, on the terms to which the person is entitled or on which the person will receive payment of the allocation, computed at a rate or rates in relation to

(i) the amount of interest payable by the person on the money borrowed, or

(ii) the amount of money borrowed by the person,

(b) in respect of the person's money on deposit with the credit union in the year, on the terms to which the person is entitled or on which the person will receive payment of the allocation, computed at a rate or rates in relation to

(i) the amount of interest payable by the credit union to the person on the money on deposit, or

(ii) the amount of money on deposit to the credit of the person, and

(c) in respect of goods or services provided to the person in the year, computed at a rate or rates in relation to

(i) the quantity, quality or value or the goods or services provided by or to the person, or

(ii) the fees paid by the person for goods or services.

(2) Unless it first receives the approval of the commission, a credit union must not pay allocations under subsection (1) that would reduce the credit union's capital base to an amount less than the amount that constitutes an adequate capital base for that credit union in accordance with the regulations under section 289 (3) (f) of the Financial Institutions Act.

Division 3 — Voting and Meetings

Voting

70  (1) No member of a credit union has more than one vote on a resolution or in an election of directors and no auxiliary member of a credit union has more than one vote on a separate resolution, except

(a) in accordance with rules that allow the chair of the meeting to have a deciding or second vote in the event of a tie vote, whether occurring by a show of hands, poll or written vote,

(b) if the credit union is a central credit union, in accordance with rules that provide as set out in section 92 for proportional voting or for delegate attendance and voting determined on a proportional basis,

(b.1) if the credit union is a central credit union, in accordance with rules that provide as set out in section 92 for voting determined both by a simple majority and by a 2/3 majority on a proportional basis in respect of the same special resolution, or

(c) in accordance with rules that provide as set out in section 58 (2).

(2) A member may vote by proxy only if

(a) the member is voting as a holder of shares in a class of equity shares that are not membership shares,

(b) the rules of the credit union allow auxiliary members to vote by proxy as holders of shares in the class referred to in paragraph (a), and

(c) the vote is on a matter on which, under the rules referred to in paragraph (b), members holding shares in the class referred to in paragraph (a) are permitted to vote by proxy.

(3) A member of a credit union who is not an individual may be represented and vote at meetings by an individual who

(a) is not a member, and

(b) by written authorization deposited with the credit union, is authorized to vote at the meetings on behalf of the member.

Voting at a meeting

71  Unless the rules otherwise provide, voting at a meeting of a credit union must be by show of hands.

Rules may allow vote in writing and by electronic means

72  The rules of the credit union may provide for voting in an election or on a resolution or a special resolution, or as to any other matter,

(a) by written vote, or

(b) by electronic means.

Voting choices for large credit union

73  ( 1 ) If a credit union has more than 10 000 members, the rules of the credit union must allow a member to vote in an election of directors and on special resolutions

(a) by voting in person at a general meeting or voting by mail ballot, whichever method the member chooses,

(b) by voting in person at a general meeting or voting by ballot at a branch office, whichever method the member chooses,

(c) by voting in person at a general meeting, voting by mail ballot or voting by ballot at a branch office, whichever method the member chooses,

(d) by voting by mail ballot or voting by ballot at a branch office, whichever method the member chooses,

(e) by voting by ballot at a branch office, or

(f) by voting by mail ballot.

(2) If the rules of a credit union with more than 10 000 members provide for voting by electronic means, a reference in subsection (1) to voting by ballot or mail ballot may be read by the credit union as a reference to voting by electronic means.

Annual general meeting

74  (1) A credit union must hold an annual general meeting not more than 15 months after

(a) the date of incorporation, or

(b) the date of amalgamation under section 20 or 21,

and afterwards the credit union must hold an annual general meeting at least once in every calendar year and not more than 135 days after the credit union's financial year end.

(2) Despite subsection (1), the commission by order applicable to one or more credit unions may extend by not more than 6 months the time within which it or they must hold an annual general meeting.

Information for annual general meeting

74.1  The directors of a credit union must place before each annual general meeting

(a) financial statements prepared under section 129 of the Financial Institutions Act relating to

(i) the period that began on the date of incorporation and ended as of the close of the credit union's first financial year or, if the credit union has completed a financial year, the latest completed financial year, as the case may be, the financial statements to be made up to a date not more than 6 months before the annual general meeting before which the financial statements are placed, and

(ii) the period, if any, that is the financial year next preceding the latest completed financial year,

(b) the report of the auditor,

(c) the report of the directors to the members, and

(d) any further information respecting the credit union that the rules require or that the Lieutenant Governor in Council may prescribe.

Meetings

75  (1) The rules of a credit union may provide for the holding of general or special meetings of members by holding 2 or more meetings of members at different times and places, which meetings together are to constitute a single meeting, and, in that case,

(a) the total of the votes that are cast on a resolution or special resolution or on an election of directors at the meetings must be counted after the last of the meetings has been held, and

(b) in ascertaining the result of the voting, the votes cast at the meetings and,

(i) if section 73 applies, any votes cast by mail ballot and any votes cast by voting in branch offices must be taken into account, and

(ii) if the rules provide as set out in section 72, any written votes cast must be taken into account.

(2) The directors must ensure that each notice convening the meetings that constitute a single meeting under subsection (1) states, in addition to any other information required to be contained in it, the substance of the provision allowing the holding of those meetings and that those meetings are being held under that provision.

Minutes

75.1  (1) A credit union must cause minutes of all proceedings at general meetings, class meetings and meetings of its directors and of committees of its directors to be kept.

(2) The minutes referred to in subsection (1), if purported to be signed by the chair of the meeting at which the proceedings were taken or by the chair of the next succeeding meeting, are evidence of the proceedings.

(3) If minutes of a meeting have been entered and signed in accordance with this section,

(a) the meeting is deemed to have been duly held and convened,

(b) all proceedings at the meeting are deemed to have been duly taken, and

(c) all elections and appointments of directors, officers or liquidators made at the meeting are deemed to be valid

until the contrary is proved.

Special general meetings

76  (1) In this section, "proposal" means any matter proposed by members for consideration at a special general meeting and includes a proposed special resolution.

(2) The directors of a credit union may call a special general meeting of the credit union.

(3) By a requisition that may be signed in several counterparts, each bearing the signature of one or more members of the credit union, the members may requisition that the directors call a special general meeting for the purpose of considering a proposal.

(4) A requisition under subsection (3) must

(a) be signed and dated by not less than 5% in number of the members or 300 members, whichever is the lesser,

(b) state the proposal to be considered at the special general meeting,

(c) state the name and mailing address of one of the members as a representative of all the requisitioning members, and

(d) be deposited at the registered office of the credit union within 60 days of the first signing of the requisition by a requisitioning member.

(5) If the directors receive a requisition that complies with subsection (4), then, within 21 days after the date the requisition is deposited at the registered office of the credit union, the directors must

(a) call the requisitioned special general meeting to consider the proposal, or

(b) refuse to call the requisitioned special general meeting on one or more of the following grounds:

(i) the requisition was not deposited at the registered office of the credit union at least 90 days before the anniversary date of the last annual general meeting, or at least 90 days before the date on which it is proposed that the meeting be held;

(ii) it clearly appears that the proposal is submitted by the members for the purpose of enforcing a personal claim or redressing a personal grievance against the credit union or its directors or officers, or primarily for the purpose of promoting causes that are extraneous to the purposes of the credit union;

(iii) substantially the same proposal was considered and defeated by the membership within the 2 years immediately before the date of deposit at the registered office of the credit union of the requisition containing the current proposal.

(6) The directors must give notice promptly to the representative of the requisitioning members of a decision under subsection (5) to call or to refuse to call the requisitioned special general meeting, and if the directors refuse to call the meeting, they must include in the notice their reasons for the refusal.

(7) If the directors call the requisitioned special general meeting under this section, then, at the request of the representative of the requisitioning members, the directors must attach to the proposal for circulation a statement, supplied by the requisitioning members, of not more than 400 words in support of the proposal, and the name and address of the representative of the requisitioning members.

(8) No credit union or person acting on its behalf incurs any liability only because of circulating a proposal or supporting statement in compliance with subsection (7).

(9) Within 14 days after the representative of the requisitioning members receives the notice referred to in subsection (6) of the directors' decision under subsection (5) (b), any member of the credit union may appeal to the commission the directors' decision to refuse to call a requisitioned special general meeting and, on receiving notice of the appeal, the commission may

(a) make an order confirming the directors' decision to refuse to call the requisitioned special general meeting, or

(b) order the directors to call the requisitioned special general meeting.

(10) Without limiting the powers given under subsection (9), the commission, in an order under that subsection, may

(a) appoint a time and place for the requisitioned special general meeting ordered under subsection (9) (b),

(b) require amendments the commission considers necessary or advisable to the proposal, supporting statement or notice of meeting, and

(c) establish procedures for the conduct of the requisitioned special general meeting referred to in subsection (9) (b).

(11) On receiving notice of an order made by the commission under subsection (9) (b), the directors must call the requisitioned special general meeting in accordance with the order.

Members' special resolutions at other meetings

77  (1) By requisition signed by not less than 5% in number of the members or 300 members, whichever is the lesser, members of a credit union may propose a special resolution for consideration at a general meeting.

(2) Section 76 applies in respect of a proposed special resolution under this section.

Notice of general meeting

78  (1) The directors must give at least

(a) 18 days' notice, or

(b) if the rules provide for a longer period of notice, that longer period of notice

of each general meeting and each special resolution to each member of the credit union and to the superintendent.

(2) A notice of a general meeting must specify

(a) the place, the day and the hour of the meeting, and

(b) the nature of any special business to be considered at the meeting.

(3) If a member of a credit union consents in writing to the giving of a notice under this section to another member of the credit union who occupies the same home as the member, notice to that other member is effective notice to the person consenting.

(4) The credit union need not give the notice required in this section to a junior member of the credit union.

(5) If a notice of a general meeting or special resolution given under subsection (1) is sent by post, service or delivery of it is deemed to be effected by properly addressing, prepaying and mailing the notice, and, unless the rules of the credit union provide for a longer period of time, the service or delivery is deemed to have been effected 5 days, Saturdays and holidays excepted, following the date of mailing.

(6) Where mail service is not available, a notice required under subsection (1)

(a) may be given by advertising on 2 separate occasions not less than 5 days apart, inclusive of the day of publication, in a newspaper circulating in the area in which the credit union carries on its operations, and

(b) is deemed to have been received by the member on the day of the last publication.

Location of general meetings

79  A general meeting of a credit union may be held in

(a) British Columbia, or

(b) another province as approved by resolution of the members and

(i) under the laws of which a member of the central credit union is incorporated, in the case of a central credit union, or

(ii) in which the credit union has a branch office, in the case of a credit union other than a central credit union.

Special resolutions

80  (1) A credit union must file with the superintendent every special resolution passed by its members.

(2) A reference in the constitution or rules of a credit union to an extraordinary resolution is deemed to be a reference to a special resolution.

Part 4 — Business

Business outside British Columbia

81  (1) Subject to subsection (1.1), a credit union or its subsidiary, other than a central credit union or a subsidiary of a central credit union, must not carry on business outside of British Columbia.

(1.1) With the consent of the commission and the deposit insurance corporation, a credit union or a subsidiary of a credit union may carry on business outside of British Columbia to the extent permitted under the laws of another jurisdiction.

(2) Despite subsection (1),

(a) a credit union has and is deemed always to have had capacity to perfect or register, outside British Columbia, a note, mortgage, lien or other instrument evidencing indebtedness or obligation to the credit union and, for that purpose, to accept powers and rights from a lawful authority outside British Columbia,

(b) subsidiaries of a credit union carrying on a prescribed kind of business may carry on that kind of business outside British Columbia, and

(c) a credit union may establish agents outside British Columbia for the purpose of providing services to the credit union's members who reside in British Columbia.

Insurance

82  A credit union that, on September 15, 1990, is making or participating in contracts of insurance in reliance on section 54 (1) to (3) of the Credit Union Act, R.S.B.C. 1979, c. 79, may continue to do so in compliance with the provisions of section 54 (1) to (3) of that repealed Act, and those provisions are deemed to be conditions of that credit union's business authorization.

Form and effect of contracts

82.1  (1) A contract that, if made between individuals, would by law be required to be in writing and under seal, may be made for a credit union in writing under seal and, in the same manner, may be varied or discharged.

(2) A contract that, if made between individuals, would by law be required to be in writing and signed by the parties to be charged, may be made for the credit union in writing signed by a person acting under the credit union's authority, express or implied, and, in the same manner, may be varied or discharged.

(3) A contract that, if made between individuals, would by law be valid although made orally and not reduced to writing, may be made in the same manner for the credit union by a person acting under the credit union's authority, express or implied, and, in the same manner, may be varied or discharged.

(4) A contract made according to this section is effectual in law, and binds the credit union, the credit union's successors and all other parties to the contract.

(5) A bill of exchange or promissory note is deemed to have been made, accepted or endorsed on behalf of a credit union if made, accepted or endorsed in the name of, or by, or on behalf of, or on account of, the credit union by a person acting under the credit union's authority.

Authentication of documents

82.2  A document that requires authentication or certification by a credit union may be authenticated or certified by a director or officer of the credit union, or by the solicitor for the credit union, and need not be under the credit union's common seal.

Liability of insiders

82.3  (1) In this section:

"associate", if used to indicate a relationship with a person, means

(a) a corporation of which that person beneficially owns, directly or indirectly, shares carrying more than 10% of the voting rights attached to all shares of the corporation for the time being outstanding carrying voting rights that are at that time capable of being exercised,

(b) a partner of that person,

(c) a trust or estate in which that person has a substantial beneficial interest or for which that person serves as trustee or in a similar capacity,

(d) a spouse, son or daughter of that person, or

(e) a relative of that person or of that person's spouse, other than a relative referred to in paragraph (d), who has the same home as that person;

"insider of a credit union" means

(a) any director or senior officer of the credit union or his or her associate, or

(b) the credit union itself,

and every director or senior officer of a credit union that is itself an insider of a credit union is an insider of the credit union.

(2) An insider or affiliate of an insider of a credit union who, in connection with a transaction relating to any share of the credit union or any debt obligation of the credit union, makes use of any specific confidential information for the benefit or advantage of the insider or affiliate or of any associate or affiliate of the insider or affiliate, that, if generally known, might reasonably be expected to affect materially the value of the share or the debt obligation, is

(a) liable to compensate any person for any direct loss suffered by the person as a result of the transaction, unless the information was known or ought reasonably to have been known to the person at the time of the transaction, and

(b) accountable to the corporation for any direct benefit or advantage received or receivable by the insider or affiliate, as the case may be, as a result of the transaction.

Part 4.1 — Debentures

Interpretation

82.4  (1) In this Part, "debenture" does not include

(a) an assignment of book accounts within the meaning of the Book Accounts Assignment Act, R.S.B.C. 1979, c. 32,

(b) a mortgage of land only, or

(c) an instrument charging personal property only and required to be registered under the Chattel Mortgage Act, R.S.B.C. 1979, c. 48.

(2) This Part does not apply in respect of a mortgage or debenture issued by a credit union before June 25, 1975, but, despite any limitation as to time, a credit union may register a mortgage or debenture issued by the credit union before then, and, on registration, this Part does apply in respect of the mortgage or debenture.

Enforcement of contract to take debentures

82.5  A contract with the credit union to take up and pay for a debenture of the credit union may be enforced by an order for specific performance.

Validity of perpetual debenture

82.6  Despite any rule of equity to the contrary, no condition contained in a debenture, or in a deed for securing a debenture, is invalid merely because the debenture is made irredeemable or redeemable only on the happening of a contingency, however remote, or on the expiration of a period, however long.

Issue of redeemed debenture

82.7  (1) If a credit union redeems a debenture that was previously issued as one of a series,

(a) unless an express or implied provision to the contrary is contained in the debenture, the rules or a contract entered into by the credit union, or

(b) unless the credit union has, by a resolution of the members, manifested the credit union's intention that the debenture be cancelled,

the credit union has, and is deemed always to have had, power to reissue the debenture, either by reissuing the same debenture or by issuing another debenture in its place, and

(c) if the debenture so states, or

(d) if the debenture was first issued before January 1, 1977,

on the reissue the person entitled to the debenture has, and is deemed always to have had, the same priority as if the debenture had never been redeemed.

(2) If a credit union redeems a debenture and has the power to reissue the debenture, particulars of that debenture must be included in the balance sheet of the credit union.

(3) If a credit union has issued or deposited a debenture created by the credit union to secure advances on current account or otherwise, the debenture is not deemed to have been redeemed merely because any of the advances are repaid, or that the account of the credit union ceases to be in debit, while the debenture remains issued or deposited.

(4) The reissue of a debenture or the issue of another debenture in its place under this section is deemed not to be the issue of a new debenture for the purpose of a provision limiting the amount or number of debentures to be issued.

Part 5 — Management

Division 1 — Directors

Directors

83  (1) The persons who are the proposed first directors of a credit union immediately before the filing of its constitution and rules under section 8 are the first directors of the credit union.

(2) Unless the rules otherwise provide,

(a) succeeding directors must be elected in accordance with the regulations, and

(b) a director may be elected, or appointed to fill a casual vacancy on the board, in accordance with the regulations.

(3) Only a member of a credit union is eligible to become or act as a director of the credit union.

(4) The rules of a credit union may provide for the election of directors to represent a geographic area or class of members and may provide for the election of a director by members within the geographic area or class.

(5) A meeting of directors may be held in

(a) British Columbia, or

(b) another province

(i) under the laws of which a member of the central credit union is incorporated, in the case of a central credit union, or

(ii) in which the credit union has a branch office, in the case of a credit union other than a central credit union.

(6) A meeting of directors of a credit union by the means described in section 84.22 (2) complies with subsection (5) of this section if a majority of the directors participating in the meeting are in British Columbia at the time of the meeting.

Director training

84  (1) The Lieutenant Governor in Council by order may designate one or more central credit unions to establish a credit union director training program.

(2) A central credit union designated under subsection (1) that establishes a credit union director training program may specify

(a) the subject matter to be included in the training program, and

(b) the period for completion of the training program by persons enrolled in it.

(3) Within the period specified under subsection (2) (b),

(a) a person elected or appointed for the first time as a director of a credit union, or

(b) if required by a central credit union designated under subsection (1), every director of a credit union who has not completed the program

must complete a training program established under this section.

Conditions of election or appointment of director

84.1  (1) No election or appointment of a person as a director is valid unless

(a) the person consented in writing to act as a director before the election or appointment, or

(b) the person, if elected or appointed at a meeting, was present and did not refuse at the meeting to act as a director.

(2) A consent in writing given under subsection (1) (a) is only effective until the next following annual election or appointment of directors unless the consent states it is effective until

(a) revoked, or

(b) a date or time stated in the consent.

Credit union to file returns as to directors

84.11  A credit union, within 14 days after the appointment or election of a director, must file with the registrar a notice, in a form established by the registrar, of the appointment or election, but no filing is necessary for a director who ceases to be a director and is re-elected or reappointed on the same day.

Persons disqualified as directors

84.12  (1) No person is qualified to become or to act as a director of a credit union who is

(a) under the age of 19 years,

(b) found to be incapable of managing the person's own affairs by reason of mental infirmity,

(c) a corporation,

(d) an undischarged bankrupt,

(e) unless the Supreme Court orders otherwise, convicted in or out of British Columbia of an offence

(i) in connection with the promotion, formation or management of a corporation, or

(ii) involving fraud

unless 5 years have elapsed since the expiration of the period fixed for suspension of the passing of sentence without sentencing or since a fine was imposed, or the term of imprisonment and probation imposed, if any, was concluded, whichever is the latest, but a person is not disqualified under this paragraph if a pardon was granted or issued, or a record suspension was ordered, under the Criminal Records Act (Canada) and the pardon or record suspension, as the case may be, has not been revoked or ceased to have effect, or

(f) a person whose registration in any capacity has been cancelled under

(i) the Securities Act by either the British Columbia Securities Commission or the executive director appointed under section 8 of that Act, or

(ii) the Mortgage Brokers Act by the Commercial Appeals Commission, the Financial Services Tribunal or the registrar under that Act,

unless the person or body that cancelled the registration otherwise orders at the time of cancellation, or unless 5 years have elapsed since the cancellation of the registration.

(2) An order must not be made under subsection (1) (e) and (f) unless notice of the application for the order is given to the registrar and superintendent, who may appear as a party to the application.

Share qualification

84.13  (1) Without limiting section 83 (3), a director who is by the rules of a credit union required to hold a specified share qualification, in this section called the "share qualification", and who is not already qualified, must obtain the share qualification within

(a) 2 months after the director's election or appointment, or

(b) the time set by the rules,

whichever first occurs.

(2) The office of director is vacated if the director

(a) does not, within the time provided in subsection (1), obtain the share qualification, or

(b) at any time after the expiration of the time provided in subsection (1), ceases to hold the share qualification,

and a person vacating office under this section is incapable of being a director of the credit union until the person obtains the share qualification.

Register of directors

84.14  A credit union must keep a register of its directors and enter in the register

(a) the full names and resident addresses of the directors,

(b) the date on which each director was elected or appointed,

(c) the date on which each former director ceased to hold office as a director, and

(d) the name of any office in the credit union held by a director and the date of appointment to the office and the date on which the director ceases to hold office.

Powers and functions of directors

84.15  (1) Subject to this Act and the constitution and rules of the credit union, the directors must manage or supervise the management of the affairs and business of the credit union.

(2) No limitation or restriction on the powers or functions of the directors is effective against a person who does not have knowledge of the limitation or restriction.

No exculpation

84.16  The provisions of a contract, the constitution or rules, or the circumstances of a director's appointment do not relieve the director from the duty to act in accordance with this Act and the Financial Institutions Act, and the regulations under both Acts, or from any liability that by virtue of any rule of law would otherwise attach to the director in respect of any negligence, default, breach of duty or breach of trust of which the director may be guilty in relation to the credit union.

Director to disclose interest

84.17  (1) A director of a credit union who, in any way, directly or indirectly, is interested in a proposed contract or transaction with the credit union must disclose the nature and extent of the director's interest at a meeting of the directors.

(2) The disclosure required by subsection (1) must be made

(a) at the meeting at which a proposed contract or transaction is first considered,

(b) if the director was not, at the time of the meeting referred to in paragraph (a), interested in a proposed contract or transaction, at the first meeting after the director becomes interested, or

(c) at the first meeting after the relevant facts come to the director's knowledge.

(3) For the purpose of this section, a general notice in writing given by a director of a credit union to the other directors of the credit union to the effect that the director is a member, auxiliary member, director or officer of a specified corporation, or that the director is a partner in, or owner of, a specified firm, and that the director has an interest in a specified corporation or firm, is a sufficient disclosure of interest to comply with this section.

(4) A director of a credit union is not deemed to be interested or to have been interested at any time in a proposed contract or transaction merely because

(a) if the proposed contract or transaction relates to a loan to the credit union, the director or a specified corporation or specified firm in which the director has an interest has guaranteed or joined in guaranteeing the repayment of the loan or any part of the loan,

(b) if the proposed contract or transaction has been or will be made with or for the benefit of an affiliated corporation, the director is a director or officer of that corporation,

(c) the proposed contract or transaction relates to an indemnity under section 102 of the Financial Institutions Act or to insurance under that section, or

(d) the proposed contract or transaction relates to the remuneration of a director in that capacity.

Director liable to account

84.18  (1) A director referred to in section 84.17 (1) must account to the credit union for any profit made as a consequence of the credit union entering into or performing the proposed contract or transaction, unless

(a) he or she discloses his or her interest as required by section 84.17,

(b) after his or her disclosure the proposed contract or transaction is approved by the directors, and

(c) he or she abstains from voting on the approval of the proposed contract or transaction,

or unless

(d) the contract or transaction was reasonable and fair to the credit union at the time it was entered into, and

(e) after full disclosure of the nature and extent of his or her interest, the contract or transaction is approved by special resolution.

(2) Unless the rules otherwise provide, a director referred to in section 84.17 (1) must not be counted in the quorum at a meeting of the directors at which the proposed contract or transaction is approved.

Validity

84.19  The circumstance that a director is, in any way, directly or indirectly, interested in a proposed contract or transaction, or a contract or transaction, with the credit union does not make the contract or transaction invalid, but, if the matters referred to in section 84.18 (1) (a) to (c) or section 84.18 (1) (d) and (e) have not occurred, the Supreme Court, on the application of the credit union or any interested person, may enjoin the credit union from entering into the proposed contract or transaction, or set aside the contract or transaction, or make any other order that the court considers appropriate.

Disclosure of conflict of office or property

84.2  (1) A director of a credit union who holds any office, or possesses any property, whereby, whether directly or indirectly, a duty or interest might be created in conflict with the director's duty or interest as a director of the credit union, must declare at a meeting of the directors of the credit union the fact, and the nature and extent of the conflict.

(2) The declaration must be made by a director referred to in subsection (1) at the first meeting of the directors held

(a) after he or she becomes a director, or

(b) if he or she is already a director, after he or she began to hold the office or possess the property.

Validity of acts of director

84.21  An act of a director and officer is valid, despite any defect that may afterwards be discovered in the director's or officer's appointment, election or qualification.

Resolution of directors in writing

84.22  (1) A resolution of the directors or of any committee of the directors may not be passed without a meeting, except as permitted by subsection (3).

(2) If the rules provide for it, a meeting of directors or of a committee of directors may be held by

(a) telephone, or

(b) other communications facilities

that permit all participants in the meeting to hear each other, and a director who participates in the meeting by those means must be counted as present at the meeting.

(3) Unless the rules provide otherwise, a resolution of the directors or of any committee of the directors may be passed without a meeting if all the directors, or the members of the committee, as the case may be, consent to the resolution in writing and the consent is filed with the minutes of proceedings of the directors or the committee.

Directors' liability

84.23  (1) Directors of a credit union who vote for, or consent to, a resolution authorizing

(a) a commission or discount contrary to section 55.5, or

(b) an act contravening section 12.1 in respect of which the credit union has paid compensation to any person

are jointly and severally liable to the credit union to make good any loss or damage suffered by the credit union as a result.

(2) The liability imposed by subsection (1) is in addition to and not in derogation of any liability imposed on a director by any other Act, regulation or rule of law.

(3) For the purposes of this section, a director of a credit union who is present at a meeting of directors, or of a committee of directors, is deemed to have consented to a resolution referred to in subsection (1) passed at the meeting unless

(a) the director's dissent is entered in the minutes of the meeting,

(b) the director's written dissent is delivered to the secretary of the meeting before the meeting's adjournment, or

(c) the director's written dissent is delivered or sent by registered mail to the registered office of the credit union immediately after the adjournment of the meeting.

(4) A director who votes for a resolution referred to in subsection (1) is not entitled to dissent under subsection (3).

(5) A director who is not present at a meeting of directors, or of a committee of directors, at which a resolution referred to in subsection (1) is passed is deemed to have consented to the resolution, unless within 7 days after becoming aware of the resolution the director mails his or her written dissent by registered mail or delivers the written dissent to the registered office of the credit union.

(6) The secretary of the credit union, on receipt of a written dissent, must certify on the written dissent the date, time and place the dissent is received at the registered office and must keep the dissent with the minutes of the meeting at which the resolution was passed.

(7) In an action to enforce a liability imposed by subsection (1), the Supreme Court, on the application of the credit union or any defendant, may join as a defendant any person who has received a benefit as a result of the resolution complained of and may make that person liable to the credit union jointly and severally with the directors to the extent of the amount paid to that person.

(8) No director of a credit union is liable under subsection (1) if the director

(a) proves that the director did not know and could not reasonably have known that the act authorized by the resolution was contrary to this Act, or

(b) relies and acts in good faith on statements of fact represented to the director by an officer of the credit union to be correct, or on statements contained in a written report of the auditor of the credit union.

Ceasing to hold office

84.24  (1) A director ceases to hold office when his or her term expires in accordance with the rules or when he or she

(a) dies or resigns,

(b) is removed in accordance with subsection (3),

(c) is not qualified under section 84.12 (1), or

(d) is removed in accordance with the constitution or rules.

(2) A resignation of a director becomes effective at the time a written resignation is delivered to the registered office of the credit union or at the time specified in the resignation, whichever is later.

(3) A credit union, despite any provision in the constitution or rules, may,

(a) by special resolution, remove a director before the expiration of the director's term of office, and

(b) by ordinary resolution, appoint another person in that director's stead.

Vacancy and quorum

84.25  (1) Unless the rules otherwise provide, a casual vacancy that occurs among the directors may be filled for the unexpired term by the remaining directors.

(2) If the number of directors of a credit union is reduced below the number set by, or under, the rules as the necessary quorum for directors, the continuing directors may act for the purpose of filling the vacancies up to that number, or of summoning a general meeting of the credit union, but for no other purpose.

(3) If there are no directors, a majority of the members entitled to elect directors may, by instrument in writing, designate one director to exercise the rights of continuing directors under subsection (2).

Notice of cessation

84.26  A credit union, within 14 days after the resignation or removal of a director or the credit union becoming aware of a director of the credit union not being qualified, must file with the registrar a notice, in the form established by the registrar, of the director ceasing to hold office, but no filing is necessary for a director who ceases to be a director and is re-elected or reappointed the same day.

Division 2 — Officers

President and secretary

84.3  (1) A credit union must have a president and a secretary, who must be different persons, and other officers as are provided for by the constitution or rules or by resolution of the directors.

(2) A person who is not qualified under section 84.12 (1) to become a director of a credit union must not be an officer of the credit union.

(3) If the rules do not provide for the election, appointment or removal of officers, the directors

(a) must appoint or elect the secretary,

(b) may appoint or elect other officers, and

(c) may, with or without cause, remove any officer.

(4) The removal of an officer without cause is without prejudice to the officer's contractual rights, but the election or appointment of an officer does not of itself create any contractual rights.

Duty to comply

84.31  A director or officer of a credit union must comply with this Act and the regulations, and with the constitution and rules of the credit union.

Duty to disclose

84.32  An officer of a credit union who holds any office or possesses any property whereby, whether directly or indirectly, duties or interests might be created in conflict with his or her duties or interests as an officer of the credit union must disclose in writing to the president the fact and the nature and extent of the conflict.

Duties of secretary

84.33  The secretary of a credit union must

(a) keep or cause to be kept the records of the credit union,

(b) make or cause to be made all required filings for the credit union with the registrar,

(c) file with the registrar, within 14 days after the resolution is passed, a certified copy of every resolution that by this Act does not take effect until the resolution is filed with the registrar, and

(d) perform other duties assigned to the office.

Part 5.1 — Court Proceedings

Derivative action

84.4  (1) In this section:

"auxiliary member" includes a beneficial owner of an equity share in the credit union, other than a membership share, that has been registered in the name of an auxiliary member;

"complainant" means, in relation to a credit union, a member, auxiliary member or director of the credit union and includes any other person who, in the discretion of the Supreme Court, is a proper person to make an application under this section;

"member" includes a beneficial owner of an equity share in the credit union that has been registered in the name of a member.

(2) A complainant may, with leave of the Supreme Court, bring an action in the name and on behalf of the credit union

(a) to enforce a right, duty or obligation owed to the credit union that could be enforced by the credit union itself, or

(b) to obtain damages for any breach of a right, duty or obligation referred to in paragraph (a),

whether the right, duty or obligation arises under this Act or otherwise.

(3) A complainant, with leave of the Supreme Court, in the name and on behalf of the credit union, may defend an action brought against the credit union.

(4) A complainant, on notice to the credit union, may apply to the Supreme Court for the leave referred to in subsection (2) or (3) and, if

(a) the complainant has made reasonable efforts to cause the directors of the credit union to commence or diligently prosecute or defend the action,

(b) the complainant is acting in good faith,

(c) it appears to the court to be in the interests of the credit union that the action be brought or defended, and

(d) in the case of an application by a member or auxiliary member, the person was a member or auxiliary member, as the case may be, of the credit union at the time of the transaction or other event giving rise to the cause of action,

the court may require that notice of the application be served on those persons, and may grant the leave on terms the court considers appropriate.

(5) While an action brought or defended under this section is pending, the Supreme Court may,

(a) on the application of a complainant, authorize any person to control the conduct of the action or give any other directions for the conduct of the action, and

(b) on the application of the person controlling the conduct of the action, order, on terms and conditions the court considers appropriate, that the credit union pay the person interim costs, including legal fees and disbursements, for which the person may be made accountable to the credit union by the court on the final disposition of the action.

(6) On the final disposition of the action, the Supreme Court may order that the costs taxed as between a solicitor and the solicitor's own client incurred by

(a) the complainant bringing or defending the action or other person controlling the conduct of the action be paid to the complainant or person by the credit union or other parties to the action, or

(b) the credit union and any director or officer of the credit union be paid to them by the complainant bringing the action or other person controlling the conduct of the action.

(7) An action brought or defended under this section must not be discontinued, settled or dismissed without the approval of the Supreme Court.

(8) An application made or an action brought or defended under this section must not be stayed or dismissed merely because it is shown that an alleged breach of a right, duty or obligation, owed to the credit union, has been or might be approved by the members and auxiliary members of that credit union, but evidence of that approval or possible approval may be taken into account by the Supreme Court in making an order under this section.

Relief

84.41  In any proceeding against a person who is a director, officer, receiver, receiver manager or liquidator of a credit union, if it appears to the Supreme Court that the person is or may be liable in respect of negligence, default, breach of duty or breach of trust, but has acted honestly and reasonably and ought fairly to be excused, the court must take into consideration all the circumstances of the case, including those connected with the person's appointment, and may relieve the person, either wholly or partly, from liability, on the terms the court considers necessary.

Applications to court

84.42  (1) An application to the Supreme Court under this Act must be made by motion and, unless notice is specifically required by this Act, may be brought without notice to any other person.

(2) Despite subsection (1), the Supreme Court may direct that notice of the application be served on those persons the court requires.

Service on credit union

84.43  A document may be served on a credit union

(a) by leaving the document at the registered office of the credit union,

(b) by mailing the document by registered post addressed to the registered office of the credit union,

(c) by personally serving any director, officer or liquidator of the credit union, or

(d) if a receiver manager has been appointed, by personally serving the receiver manager.

Part 6 — Central Credit Unions

Incorporation of central credit union

85  (1) A central credit union may be incorporated in the same manner as a credit union, with variations the commission may permit having regard to the circumstances, except that the constitution and rules must be subscribed to by representatives of not fewer than 10 credit unions that are not subject to supervision by the commission.

(2) A central credit union may issue only equity shares and any share issued by a central credit union before September 15, 1990 is deemed to be an equity share.

(3) Sections 16, 44, 45 and 60 (1) and (2) do not apply to a central credit union.

Powers under other legislation

86  (1) A central credit union may accept and exercise all rights, powers, privileges and immunities conferred on it by the Cooperative Credit Associations Act (Canada) or the Financial Institutions Act.

(2) A central credit union may become a member of, buy shares in, deposit with or borrow money from

(a) a central credit union,

(b) a cooperative credit society or an association, as defined in the Cooperative Credit Associations Act (Canada), and

(c) any similar institution incorporated under the laws of Canada or of any province.

Significant changes

86.1  (1) A central credit union may dispose of all or substantially all of its assets to a Canadian financial institution within the meaning of the Cooperative Credit Associations Act (Canada), but only if the financial institution is designated by regulation.

(2) The disposition may only be made in accordance with the regulations.

(3) The disposition must be approved by resolution at a general meeting of the central credit union of which the notice required under section 78 has been given.

(4) The resolution must be passed by

(a) a majority of not less than 2/3 of the members who, being entitled to do so, vote in person at the meeting or, if permitted by section 70 (3), through a representative who is present in person, and

(b) if the central credit union has adopted a rule under section 92 (1) (b) that provides for voting on a proportional basis, a majority of not less than 2/3 of the votes cast according to that rule.

Canada Deposit Insurance Corporation

87  A central credit union may

(a) enter into an agreement with the Canada Deposit Insurance Corporation, the government of Canada or an agent of the Canada Deposit Insurance Corporation or of the government of Canada to obtain loans or other financial assistance or policies of insurance,

(b) act as agent of the Canada Deposit Insurance Corporation, and

(c) accept rights, powers, privileges and immunities that may be conferred on a central credit union under the Canada Deposit Insurance Corporation Act.

Agent for bond sales

88  A central credit union may act as agent for primary or secondary distribution of bonds or other evidence of indebtedness of or guaranteed by the government of Canada or a province and for that purpose may trade in the bonds or other evidence of indebtedness to the extent necessary.

Loans to members

89  A central credit union may make a loan to

(a) a member,

(b) an employee, and

(c) an employee of a member, at the request of the member.

Other services

90  (1) A central credit union may provide services that are not prohibited under this Act to or for its members if, in the opinion of the directors of the central credit union, the services are incidental or conducive to the sound operation of its members or to the attaining of the purposes of its members.

(2) If it first obtains the consent of the commission to do so, and while it continues to have that consent, a central credit union may provide insurance or arrange for insurance

(a) for directors, committee members, officers and employees of its member credit unions and of subsidiaries of its member credit unions, and

(b) that may be required under section 206 of the Financial Institutions Act,

and may charge premiums for insurance.

Director's qualifications

91  An individual is not eligible to be or to continue to be a director of a central credit union unless the individual is a member of a member of the central credit union.

Rules

92  (1) The rules of a central credit union may provide for

(a) the method of appointment or election of directors, including election or appointment

(i) to represent a geographic area or class of members,

(ii) by members within a geographic area or class, and

(iii) by proportional voting,

(b) a system of attendance at meetings and for voting by delegates, including provision for delegate attendance and voting determined on a proportional basis, and

(c) non-voting members, but the number of non-voting members must not exceed the number of voting members.

(1.1) The rules of a central credit union may provide that a specified category of special resolution must be passed by a majority of not less than

(a) 50% plus one of the votes cast, and

(b) 2/3 of the votes cast in accordance with rules that provide as set out in subsection (1) (b) for voting determined on a proportional basis.

(2) The rules of a central credit union must provide for the transfer, redemption or purchase of equity shares.

(3) Unless it first receives the written approval of the commission, a central credit union must not redeem, purchase or otherwise acquire equity shares of its own issue if the redemption, purchase or other acquisition would reduce the credit union's capital base to an amount less than the amount that constitutes an adequate capital base for that credit union in accordance with the regulations under section 289 (3) (f) of the Financial Institutions Act.

Part 7 — Hearings and Appeals

Orders, consents and refusals to be in writing

93  (1) An order of the commission under section 38 (1) or 76 (9) (a) or (b) must be in writing.

(2) A consent or refusal of a consent of the commission under section 11, 15.1 (4) (c), 15.2 (1) (b), 16 (3), 20 (3), 39.71, 44 (8), 81 (1.1) or 90 (2) must be in writing.

(3) Written reasons must be given for an order referred to in subsection (1) or a refusal of a consent referred to in subsection (2).

Power to impose conditions

94  (1) The commission may

(a) impose conditions that the commission considers necessary or desirable in respect of an order referred to in section 93 (1) or a consent referred to in section 93 (2), and

(b) remove or vary the conditions by the commission's own motion or on the application of a person affected by the order or consent.

(2) A condition imposed under subsection (1) is conclusively deemed to be part of the order or consent in respect of which it is imposed, whether contained in or attached to the order or consent or contained in a separate document.

Hearing requirements

95  (1) Before

(a) making an order under section 38 (1),

(b) giving a consent referred to in section 93 (2) subject to conditions,

(c) by the commission's own motion, varying conditions imposed in respect of an order or consent, or

(d) refusing to give a consent referred to in section 93 (2),

the commission must deliver notice in writing of the intended action to any person directly affected.

(2) Not later than 14 days after receiving notice under subsection (1) of an intended action, a person directly affected, by delivering a notice in writing to the commission, may require a hearing before the commission.

(3) A hearing required under subsection (2) must be held within a reasonable time after delivery of a notice in writing under subsection (2).

(4) [Repealed 2004-48-18.]

(5) After

(a) the expiry of the 14 day period referred to in subsection (2) if no hearing has been required within that period, or

(b) the hearing if one has been required within that period,

the commission may proceed in the exercise of the powers conferred under this Act in respect of the matter that was the subject of the notice delivered under subsection (1).

Public hearing

96  (1) A hearing before the commission must be open to the public.

(2) If the commission considers that a public hearing would be unduly prejudicial to a party or witness, the commission may order that the public be excluded from all or part of the hearing.

Witnesses at hearings

97  (1) For the purpose of hearings under this Act, the commission or a panel of it has the same power

(a) to summon and enforce the attendance of witnesses,

(b) to compel witnesses to give evidence on oath or in any other manner, and

(c) to compel witnesses to produce records and things,

the Supreme Court has for the trial of civil actions, and the failure or refusal of a person

(d) to attend,

(e) to take an oath,

(f) to answer questions, or

(g) to produce the records or things in his or her custody or possession,

makes the person, on application to the Supreme Court, liable to be committed for contempt as if the person were in breach of an order or judgment of the Supreme Court.

(2) Section 34 (5) of the Evidence Act does not apply for the purpose of hearings under this Act.

(3) A person giving evidence at a hearing under this Act may be represented by counsel.

Appeal

98  (1) A person directly affected by

(a) an order of the superintendent under section 76 (9) (a) or (b) acting in accordance with a delegation by the commission,

(b) a consent referred to in section 93 (2) that is given subject to conditions by the superintendent acting in accordance with a delegation by the commission, or

(c) a refusal of the superintendent, acting in accordance with a delegation by the commission, to give a consent referred to in section 93 (2)

may appeal the order, the conditional consent or the refusal of consent to the tribunal, and, unless otherwise provided for in this Act, sections 242.2 and 242.3 of the Financial Institutions Act apply.

(2) Despite section 242.2 (2) of the Financial Institutions Act, an appeal under subsection (1) of this section operates as a stay unless an order is made under section 242.2 (10) (a) of the Financial Institutions Act.

(3) A person directly affected by

(a) a consent, referred to in section 93 (2), that is given subject to conditions,

(b) a refusal of the commission to give a consent referred to in section 93 (2), or

(c) an order of the commission under section 76 (9)

may appeal the conditional consent, refusal or order to the Supreme Court and, unless otherwise provided for in this Act, section 242.4 (2) to (5) of the Financial Institutions Act applies.

Immunities

99  (1) An action for damages because of anything done or omitted to be done in good faith

(a) in the performance or intended performance of a duty, or

(b) in the exercise or intended exercise of a power

under this Act must not be brought against the commission, a member of it, the superintendent or a person who is subject to the commission's or superintendent's direction.

(2) Subsection (1) does not absolve the government from vicarious liability for an act or omission of

(a) the commission or a member of it,

(b) the superintendent, or

(c) a person who is subject to the commission's or superintendent's direction

for which act or omission the government would be vicariously liable if this section were not in force.

Confidential information

100  An individual or entity who, under this Act, obtains

(a) information, or

(b) records

that are submitted in accordance with a request that is made or an obligation that is imposed under this Act must not disclose the information or records to any individual or entity, other than for the purposes of administering this Act and the regulations, for the purposes of a prosecution or if required by law.

Part 8 — Offences and Penalties

Offences

101  (1) Section 5 of the Offence Act does not apply to this Act or to the regulations.

(2) A person commits an offence who

(a) contravenes section 13, 64 (8), 65 (3) (b) or 69 (2),

(b) contravenes section 14, 39.46, 60 (4), 61 (1) or (2), 62 (2) or (5), 63 or 68,

(c) knowingly provides false information in relation to a matter under this Act, or

(d) [Repealed 2011-29-54.]

(e) contravenes a condition of a consent given under this Act.

(3) If a credit union commits an offence under this Act, an employee, officer, director or agent of the credit union who authorizes, permits or acquiesces in the offence commits the same offence, whether or not the credit union is convicted of the offence.

(4) [Repealed 2011-29-54.]

(5) A person referred to in section 30.3 who contravenes that section commits an offence.

(6) A credit union that contravenes section 39.4, 39.42, 39.47, 39.48, 39.73 or 39.75 commits an offence.

(7) A credit union that contravenes section 84.11 commits an offence and is liable to a fine not exceeding $50 for each day the credit union is in default.

(8) No information may be laid under subsection (7) after the credit union has filed the notice required by section 84.11.

(9) A credit union that contravenes section 84.26 commits an offence and is liable to a fine not exceeding $50 for each day the credit union is in default.

(10) A credit union that issues, publishes or circulates financial statements that do not comply with section 39.49 commits an offence.

(11) A credit union that refuses to permit a person to examine or take extracts from any record, document or instrument or to furnish a person with a copy contrary to sections 39.43 to 39.45 commits an offence, and, in imposing a penalty for the offence, the court may order that an examination or extract be permitted or a copy furnished within a time the court considers appropriate.

(12) A director of a credit union who makes an affidavit under section 25.2 without having reasonable grounds for the opinion that the credit union will be able to pay the credit union's debts in full within the period specified in the affidavit commits an offence.

(13) A person who acts as a director of a credit union and is a person who, because of section 84.12 (1), is not qualified to act as a director of a credit union commits an offence.

(14) A person who acts as an officer of a credit union and is a person who is prohibited by section 84.3 (2) from being an officer commits an offence.

(15) A person who acts as a liquidator and is a person who is not qualified to act as a liquidator commits an offence.

(16) A liquidator who contravenes any provision of Part 2.1 commits an offence.

Penalties

102  (1) A person who commits an offence under section 101 (2) (a) or (c) is liable

(a) in the case of a corporation, on a first conviction to a fine of not more than $100 000 and on each subsequent conviction to a fine of not more than $200 000, and

(b) in the case of an individual,

(i) on a first conviction, to a fine of not more than $100 000 or to imprisonment for not more than 2 years or to both, and

(ii) on each subsequent conviction, to a fine of not more than $200 000 or to imprisonment for not more than 2 years or to both.

(2) A person who commits an offence under section 101 (2) (b) or (e), (5), (6), (10), (11), (12), (13), (14), (15) or (16) is liable

(a) in the case of a corporation, to a fine of not more than $5 000, and

(b) in the case of an individual, to a fine of not more than $2 000.

Remedies preserved

103  A proceeding, conviction or penalty for an offence under this Act does not relieve a person from any other liability.

Limitation period

104  A proceeding for an offence under this Act must not be commenced in any court more than 2 years after the facts on which the proceedings are based first come to the knowledge of the superintendent or the commission, whichever comes first.

Court order to comply

105  If a person is convicted of an offence under this Act, the court in which proceedings in respect of the offence are taken, in addition to any punishment the court may impose, may order that person to comply with the provisions of this Act or the regulations.

Innocent third parties

106  (1) A provision of this Act, that makes a transaction by a person illegal, void or unenforceable, must not be construed as extinguishing rights of any other party to the transaction if that other party acted in good faith in the transaction.

(2) A provision of the Company Act as that Act applied for the purpose of this Act, that made a transaction by a person illegal, void or unenforceable, must not be construed as having extinguished rights of any other party to the transaction if that other party acted in good faith in the transaction.

Remedy of irregularities

107  (1) If an omission, defect, error or irregularity has occurred in the conduct of the business or affairs of a credit union by which

(a) a breach of a provision of this Act or of the Company Act, as that Act applied for the purposes of this Act, has occurred,

(b) there has been default in compliance with the constitution or rules of the credit union, or

(c) proceedings at or in connection with any general meeting, class meeting, series meeting or meeting of the directors of the credit union or at or in connection with any assembly purporting to be such a meeting have been rendered ineffective,

then, despite any other provisions of this Act, the Supreme Court

(d) either of its own motion or on the application of an interested person may make an order to rectify or cause to be rectified or to negative or modify or cause to be negatived or modified the consequences in law of the omission, defect, error or irregularity, or to validate an act, matter or thing rendered or alleged to have been rendered invalid by or as a result of the omission, defect, error or irregularity, and may give ancillary or consequential directions the Supreme Court considers necessary, but

(e) before making an order, must consider the effect of the order on the credit union and on the directors, officers, members and creditors of the credit union.

(2) An order made under subsection (1) does not prejudice the rights of a third party who has acquired those rights for valuable consideration without notice of the omission, defect, error or irregularity cured by the order.

Enforcement of duty to make returns

107.1  (1) If a credit union or extraprovincial credit union or its receiver manager, liquidator or receiver of property has failed to file with the registrar any document required to be filed by this Act, the registrar, or any director, member, debentureholder or creditor of the credit union or extraprovincial credit union, may serve the person required to make the filing with notice requiring the person to file the document with the registrar.

(2) If the person referred to in subsection (1) fails to file the document within 14 days after receipt of the notice referred to in subsection (1), the court, on application by the registrar, or any director, member, debentureholder or creditor, may

(a) order the person to file, within the time the court directs, the document with the registrar, and

(b) direct that the costs of and incidental to the application be paid by any person, director or officer of the credit union or extraprovincial credit union referred to in subsection (1) as the court considers appropriate.

(3) Nothing in this section prejudices the operation of any enactment imposing penalties in respect of any default.

Part 8.1 — Administration

Division 1 — Office of Registrar

Repealed

107.2  [Repealed 2012-12-73.]

Certificate as conclusive evidence

107.3  A certificate of amalgamation or a certificate of continuation issued by the registrar is conclusive evidence that the credit union has been amalgamated or continued, as the case may be, under this Act or under the Credit Union Act, R.S.B.C. 1979, c. 79, or a former Credit Unions Act.

Division 2 — Records Filed with Registrar

Credit union to file annual report

107.4  A credit union, within 2 months after each anniversary date of the credit union's incorporation, amalgamation or continuation in British Columbia, must file with the registrar an annual report, in the form established by the registrar, containing information as to the last anniversary date.

Part 9 — Regulations and Transition

Power to make regulations

108  (1) The Lieutenant Governor in Council may make regulations referred to in section 41 of the Interpretation Act.

(2) Without limiting subsection (1), the Lieutenant Governor in Council may make regulations that the Lieutenant Governor in Council considers necessary or desirable as follows:

(a) prescribing forms whether or not specifically mentioned in this Act;

(b) requiring the use of forms prescribed under paragraph (a);

(c) prescribing the model rules for the purpose of section 7 (3);

(d) respecting information and additional information to be contained in or to accompany

(i) plans under section 11 (3) (b),

(ii) personal information returns under section 11 (3) (e), or

(iii) disclosure statements or revised disclosure statements under section 62,

and prescribing types of documents for the purpose of section 62 (2) (b);

(e) for the purposes of section 62 (3), prescribing

(i) the circumstances and conditions, and

(ii) the types of

(A) equity shares that are not membership shares, or

(B) other security instruments

issued by credit unions generally or by a particular credit union named in the regulation;

(f) prescribing fees to be paid in respect of matters connected with the administration of this Act;

(g) prescribing kinds of business for the purpose of section 81 (2) (b);

(g.1) for the purposes of section 86.1

(i) designating Canadian financial institutions to which a disposition may be made, and

(ii) establishing rules to be followed by a central credit union in making a disposition;

(h) defining a word or expression used but not defined in this Act.

(2.1) Without limiting subsection (1), the Lieutenant Governor in Council may make regulations respecting any matter for which regulations of the Lieutenant Governor in Council are contemplated by this Act.

(3) A regulation made under this Act may

(a) be made applicable generally or to a specific credit union or class of credit unions,

(b) define classes of credit unions for the purpose of the regulation, including classes that may include only one credit union, and

(c) provide differently for different credit unions or for different classes of credit unions.

(4) A regulation made under subsection (2) (g.1) may confer on a person the power to approve or refuse a disposition under section 86.1 or to establish conditions for receiving approval.

Part 10 — Review of Act

Review of Act

109  Every 10 years, the government must initiate a review of this Act to determine what changes, if any, should be made.