Complaint by member

224.  (1) A member of a company may apply to the court for an order on the ground

(a) that the affairs of the company are being conducted, or the powers of the directors are being exercised, in a manner oppressive to one or more of the members, including himself; or

(b) that some act of the company has been done, or is threatened, or that some resolution of the members or any class of members has been passed or is proposed, that is unfairly prejudicial to one or more of the members, including himself.

(2) On an application under subsection (1) the court may, with a view to bringing to an end or to remedying the matters complained of, make an interim or final order it considers appropriate, and, without limiting the generality of the foregoing, the court may

(a) direct or prohibit any act or cancel or vary any transaction or resolution;

(b) regulate the conduct of the company's affairs in future;

(c) provide for the purchase of the shares of any member of the company by another member of the company, or by the company;

(d) in the case of a purchase by the company, reduce the company's capital or otherwise;

(e) appoint a receiver or receiver manager;

(f) order that the company be wound up under Part 9;

(g) authorize or direct that proceedings be commenced in the name of the company against any party on the terms the court directs;

(h) require the company to produce financial statements;

(i) order the company to compensate an aggrieved person; and

(j) direct rectification of any record of the company.

(3) Every company referred to in subsection (1) shall file a certified copy of an order made by the court under this section, or on appeal from it, with the registrar within 14 days from its entry in the court registry.

(4) The rights granted by this section are in addition to those granted under section 251.

(5) Every company that contravenes subsection (3) commits an offence.

(6) For purposes of this section a member includes

(a) a beneficial owner of a share in the company; and

(b) any other person who, in the discretion of the court, is a proper person to make an application under this section.

Historical Note(s): 1973-18-221; 1976-12-44.

Derivative action

225.  (1) A member or director of a company may, with leave of the court, bring an action in the name and on behalf of the company

(a) to enforce a right, duty or obligation owed to the company that could be enforced by the company itself; or

(b) to obtain damages for any breach of a right, duty or obligation referred to in paragragh (a),

whether the right, duty or obligation arises under this Act or otherwise.

(2) A member or director of a company may, with leave of the court, in the name and on behalf of the company, defend an action brought against the company.

(3) A member or director may, on notice to the company, apply to the court for the leave referred to in subsection (1) or (2) and, if

(a) he has made reasonable efforts to cause the directors of the company to commence or diligently prosecute or defend the action;

(b) he is acting in good faith;

(c) it is prima facie in the interests of the company that the action be brought or defended; and

(d) in the case of an application by a member, he was a member of the company 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 it considers appropriate.

(4) While an action brought or defended under this section is pending, the court may,

(a) on the application of a member or director, 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 it sees fit, that the company pay him interim costs, including legal fees and disbursements, for which he may be made accountable to the company by the court on the final disposition of the action.

(5) On the final disposition of the action the court may order that the costs taxed as between a solicitor and his own client incurred by the

(a) member or director bringing or defending the action or other person controlling the conduct of the action be paid to him by the company or other parties to the action; or

(b) company and any director or officer of the company be paid to them by the member or director bringing the action or other person controlling the conduct of the action.

(6) No action brought or defended under this section shall be discontinued, settled or dismissed without the approval of the court.

(7) No application made or an action brought or defended under this section shall be stayed or dismissed by reason only that it is shown that an alleged breach of a right, duty or obligation, owed to the company, has been or might be approved by the members of that company; but evidence of that approval or possible approval may be taken into account by the court in making an order under this section.

(8) For purposes of this section a member includes

(a) a beneficial owner of a share in the company; and

(b) any other person who, in the discretion of the court, is a proper person to make an application under this section.

Historical Note(s): 1973-18-222; 1976-12-45; 1980-50-21, effective May 17, 1980.

Relief

226.  In any proceeding against a director, officer, receiver, receiver manager or liquidator of a company, if it appears to the court that the director, officer, receiver, receiver manager or liquidator 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 shall take into consideration all the circumstances of the case, including those connected with his appointment, and may relieve him, either wholly or partly, from his liability, on the terms the court considers necessary.

Historical Note(s): 1973-18-223.

Applications to court

227.  Every application to the court under this Act shall be made by motion and may, except where notice is specifically required by this Act, be brought ex parte; but the court may direct that notice of the application be served on those persons the court requires.

Historical Note(s): 1973-18-224.

Service on company

228.  (1) A document may be served on a company

(a) by leaving it at, or mailing it by registered post addressed to, the registered office of the company; or

(b) by personally serving any director, officer or liquidator of the company,

and, where a receiver manager has been appointed, by personally serving the receiver manager.

(2) A document may be served on an extraprovincial company registered under this Act

(a) by leaving it at, or mailing it by registered post addressed to, the head office of the company in the Province as last designated in the records of the registrar; or

(b) by personally serving any attorney of the company appointed pursuant to section 328.

Historical Note(s): 1973-18-225; 1976-12-46.

Court may order security for costs

229.  Where a corporation is plaintiff in an action or other legal proceeding and it appears that the corporation will be unable to pay the costs of the defendant if he is successful in his defence, the court may require security to be given by the corporation for those costs, and may stay all proceedings until the security is given.

Historical Note(s): 1973-18-226.

Remedy of irregularities

230.  (1) Where any omission, defect, error or irregularity has occurred in the conduct of the business or affairs of a company whereby

(a) a breach of a provision of this Act has occurred;

(b) there has been default in compliance with the memorandum or articles of the company; or

(c) proceedings at or in connection with any general meeting, class meeting, series meeting, or meeting of the directors of the company, or any assembly purporting to be such a meeting have been rendered ineffective,

notwithstanding any other provisions of this Act, the court

(d) may, either of its own motion, or on the application of any interested person, make an order to rectify or cause to be rectified or to negative or modify or cause to be modified the consequences in law of the omission, defect, error or irregularity, or to validate any 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 it considers necessary; but

(e) shall, before making an order, consider its effect on the company and its directors, officers, members and creditors.

(2) No order made under subsection (1) shall prejudice the rights of any third party who has acquired those rights for valuable consideration without notice of the omission, defect, error or irregularity cured by the order.

Historical Note(s): 1973-18-227; 1977-34-19.

Dissent procedure

231.  (1) Where,

(a) being entitled to give notice of dissent to a resolution as provided in section 37, 127, 150, 246, 268, 273 or 313, a member of a company (in this Act called a "dissenting member") gives notice of dissent;

(b) the resolution referred to in paragraph (a) is passed; and

(c) the company or its liquidator proposes to act on the authority of the resolution referred to in paragraph (a),

the company or the liquidator shall first give to the dissenting member notice of the intention to act and advise the dissenting member of his rights under this section.

(2) On receiving a notice of intention to act in accordance with subsection (1), a dissenting member is entitled to require the company to purchase all his shares in respect of which the notice of dissent was given.

(3) The dissenting member shall exercise his right under subsection (2) by delivering to the registered office of the company, within 14 days after the company, or the liquidator, gives the notice of intention to act,

(a) a notice that he requires the company to purchase all his shares referred to in subsection (2); and

(b) the share certificates representing all his shares referred to in subsection (2);

and thereupon he is bound to sell those shares to the company and the company is bound to purchase them.

(4) A dissenting member who has complied with subsection (3), the company, or, if there has been an amalgamation, the amalgamated company, may apply to the court, which may

(a) require the dissenting member to sell, and the company or the amalgamated company to purchase, the shares in respect of which the notice of dissent has been given;

(b) fix the price and terms of the purchase and sale, or order that the price and terms be established by arbitration, in either case having due regard for the rights of creditors;

(c) join in the application any other dissenting member who has complied with subsection (3); and

(d) make consequential orders and give directions it considers appropriate.

(5) The price to be paid to a dissenting member for his shares shall be their fair value as of the day before the date on which the resolution referred to in subsection (1) was passed, including any appreciation or depreciation in anticipation of the vote on the resolution, and every dissenting member who has complied with subsection (3) shall be paid the same price.

(6) The amalgamation or winding up of the company, or any change in its capital, assets or liabilities resulting from the company acting on the authority of the resolution referred to in subsection (1), shall not affect the right of the dissenting member and the company under this section or the price to be paid for the shares.

(7) Every dissenting member who has complied with subsection (3) may

(a) not vote, or exercise or assert any rights of a member, in respect of the shares for which notice of dissent has been given, other than under this section;

(b) not withdraw the requirement to purchase his shares, unless the company consents; and

(c) until he is paid in full, exercise and assert all the rights of a creditor of the company.

(8) Where the court determines that a person is not a dissenting member, or is not otherwise entitled to the right provided by subsection (2), the court may make the order, without prejudice to any acts or proceedings which the company, its members, or any class of members may have taken during the intervening period, it considers appropriate to remove the limitations imposed on him by subsection (7).

(9) The relief provided by this section is not available if, subsequent to giving his notice of dissent, the dissenting member acts inconsistently with his dissent; but a request to withdraw the requirement to purchase his shares is not an act inconsistent with his dissent.

(10) A notice of dissent ceases to be effective if the member giving it consents to or votes in favour of the resolution of the company to which he is dissenting, except where the consent or vote is given solely as a proxy holder for a person whose proxy required an affirmative vote.

Historical Note(s): 1973-18-228; 1976-12-47; 1980-50-22, effective May 17, 1980.

Meeting to advise of right to dissent

232.  A notice of a general meeting, or class meeting, of a company to consider a resolution as a result of which a notice of dissent may be filed shall contain a statement in terms that the Lieutenant Governor in Council may, by regulation, prescribe, advising a member of his right to give a notice of dissent and the consequences of giving the notice.

Historical Note(s): 1973-18-229.

Investigation of company by inspector

233.  (1) On the application of one or more members holding in the aggregate not less than 1/5 of the issued shares of any class of the company, the court may appoint an inspector to investigate the affairs and management of the company and any of its affiliates, and may determine the manner and extent of the investigation.

(2) Notice of an application under this section shall be given to the registrar, and, where the court makes an order appointing an inspector, the inspector shall within 7 days after the date of the order file a certified copy of the order with the registrar.

(3) The court may, before appointing an inspector, require the applicant to give security for payment of the costs and expenses of the investigation, and may, at any time, fix the amount of the costs and expenses, and order by whom and in what proportion they shall be paid.

(4) Every receiver of property of a company and every director, receiver manager, officer, employee, banker, auditor and agent of the company or any of its affiliates shall produce for the examination of the inspector every accounting record and every other record, document and instrument relating to the company and any of its affiliates in his custody or control, and shall give to the inspector every assistance in connection with the investigation which he is reasonably able to give.

(5) The inspector may examine on oath any person who is or was a receiver of property of a company, or a director, receiver manager, officer, employee, banker, auditor and agent of the company or any of its affiliates in relation to their affairs, management, accounts and records and may administer the oath and that person shall answer any question within the scope of the investigation put to him by the inspector.

(6) The inspector shall, on conclusion of his investigation, make his report to the court and send a copy to the registrar, the company, if the company is a reporting company, the superintendent and any other persons the court or the registrar orders.

Historical Note(s): 1973-18-230; 1976-12-48; 1983-10-21, effective October 26, 1983 (B.C. Reg. 393/83).

Appointment of inspectors by company

234.  (1) A company may, by special resolution, appoint an inspector to investigate the affairs and management of the company and any of its affiliates and to report in the manner and to the persons the resolution directs.

(2) Every inspector appointed under subsection (1) has the same powers as an inspector appointed by the court under section 233.

(3) Every person who is or was a receiver of property of the company, or every director, receiver manager, officer, employee, banker, auditor and agent of the company or any of its affiliates shall comply with section 233 (4) and (5), as if the inspector had been appointed by the court.

Historical Note(s): 1973-18-231.

Offence

235.  Every person who, contrary to section 233 or 234,

(a) refuses to produce any accounting record or other record, document or instrument;

(b) refuses to answer any question; or

(c) destroys or alters any accounting record or record, document or instrument,

or otherwise fails to comply with section 233 or 234, commits an offence.

Historical Note(s): 1973-18-232.

Minister may order investigation

236.  (1) Where it appears to the minister that it is necessary in the public interest to investigate the beneficial ownership of, or interest in, the shares or debentures of, or membership in, a corporation, he may appoint one or more inspectors who may require any person to give any information and produce any records, documents and instruments which the person has, or can reasonably be expected to obtain, as to the names and addresses of the persons interested and the extent of their present and past interests in those shares, debentures or memberships, and the names and addresses of persons who act or have acted on their behalf in relation thereto.

(2) For the purposes of this section, a person shall be deemed to have an interest in a share, debenture or membership where he has any right to acquire or dispose of the share, debenture or membership or any interest in them, or to vote in respect of them, or where his consent is necessary for the exercise of any of the rights of other persons interested in them, or if other persons interested in them can be required or are accustomed to exercise their rights in accordance with his instructions.

(3) Where, on receipt of a report from an inspector appointed under subsection (1), it appears to the minister that there is difficulty in determining the information required by this section and that the difficulty is due wholly or mainly to the unwillingness of any person concerned to give the information required by this section, the minister may, by order published in the Gazette, direct that the shares, debentures or memberships are, until further order of the minister or the court, restricted so that

(a) a transfer of those shares, debentures or memberships, or in the case of unissued shares or debentures, a transfer of the right to be issued with them and any issue of them, shall be void;

(b) no voting rights shall be exercisable in respect of those shares, debentures or memberships;

(c) no further shares, debentures or memberships shall be issued in right of those shares, debentures or memberships, or in pursuance of any offer made to the holder of them; and

(d) no payment shall be made of any sums due from the corporation on those shares, debentures or memberships, whether in respect of capital or otherwise.

(4) Where the minister makes an order directing that shares, debentures or memberships are subject to the restrictions referred to in subsection (3), any person aggrieved may apply to the court, and the court may, if it considers it appropriate, direct that the shares, debentures or memberships shall cease to be subject to all or any of those restrictions.

(5) Where any share, debenture or membership is subject to a restriction referred to in subsection (3), every person who, being the registered owner of that share, debenture or membership and having knowledge of the restriction,

(a) acts with respect to the share, debenture or membership contrary to the restriction; or

(b) fails to notify any person who, but for the restriction imposed under subsection (3), would be entitled to exercise the rights and receive the benefits restricted by the order,

commits an offence.

(6) Where a share, debenture or membership is issued in contravention of a restriction imposed by subsection (3), the corporation and every director and officer of the corporation who knowingly and willingly authorizes or permits such issue, commits an offence.

Historical Note(s): 1973-18-233; 1981-2-27.

Exemption

237.  No inspector appointed under this Part shall require a barrister or solicitor to disclose any privileged communication made to him in that capacity, except as to the name and address of his clients.

Historical Note(s): 1973-18-234.

Report as evidence

238.  A copy of the report of an inspector appointed under section 233, 234 or 236, signed by the inspector, is admissible in any legal proceeding as evidence of the opinion of the inspector.

Historical Note(s): 1973-18-235.

Offence

239.  A person who fails to give information required of him under section 233, 234 or 236 or who, in giving the information, makes a statement which he knows or ought reasonably to know to be false in a material particular, or who recklessly makes a statement which is false in a material particular, commits an offence.

Historical Note(s): 1973-18-236.