Winding-up and Restructuring Act

An Act respecting the winding-up and restructuring of companies

Canada (Federal)· W-11· 469 sections· current to 2023-06-22In force

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Economy, Business & Trade Justice & the Law Finance & Taxation

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Sections469

1Short title
This Act may be cited as the Winding-up and Restructuring Act.
2Definitions
2(1)
In this Act,
2(1)[p3]Repealed
aircraft objects[Repealed, 2012, c. 31, s. 422]
2(1)[p4]
assets means
2(1)[p4](a)
in respect of a foreign insurance company, the assets in Canada, within the meaning of subsection 2(1) of the Insurance Companies Act, of the foreign insurance company together with its other assets held in Canada under the control of its chief agent, within the meaning of section 571 of that Act, including all amounts received or receivable in respect of its insurance business in Canada, and
2(1)[p4](b)
in respect of an authorized foreign bank, assets within the meaning of section 618 of the Bank Act; (actif ou éléments d’actif)
2(1)[p7]
authorized foreign bank has the same meaning as in section 2 of the Bank Act; (banque étrangère autorisée)
2(1)[p8]
capital stock includes a capital stock de jure or de facto; (capital social)
2(1)[p9]
company includes any corporation subject to this Act; (compagnie)
2(1)[p10]
contributory means a person liable to contribute to the assets of a company under this Act, and, in all proceedings for determining the persons who are to be deemed contributories and in all proceedings prior to the final determination of those persons, it includes any person alleged to be a contributory; (contributeur)
2(1)[p11]
court means
2(1)[p11](a)
in Nova Scotia, British Columbia and Prince Edward Island, the Supreme Court,
2(1)[p11](a.1)
in Ontario, the Superior Court of Justice,
2(1)[p11](b)
in Quebec, the Superior Court,
2(1)[p11](c)
in New Brunswick, Manitoba, Saskatchewan and Alberta, the Court of Queen’s Bench,
2(1)[p11](c.1)
in Newfoundland and Labrador, the Trial Division of the Supreme Court, and
2(1)[p11](d)
in Yukon and the Northwest Territories, the Supreme Court, and in Nunavut, the Nunavut Court of Justice; (tribunal)
2(1)[p18]
creditor includes all persons having any claim against a company, present or future, certain, ascertained or contingent, for liquidated or unliquidated damages, and in all proceedings for determining the persons who are to be deemed creditors, it includes any person making any such claim; (créancier)
2(1)[p19]
federal credit union has the same meaning as in section 2 of the Bank Act; (coopérative de crédit fédérale)
2(1)[p20]
financial institution has the same meaning as in section 3 of the Office of the Superintendent of Financial Institutions Act; (institution financière)
2(1)[p21]
foreign insurance company means an insurance company that is authorized under Part XIII of the Insurance Companies Act to insure in Canada risks; (société étrangère)
2(1)[p22]
insurance company means a company transacting the business of insurance and includes any unincorporated association or reciprocal exchange transacting that business; (compagnie d’assurance)
2(1)[p23]Repealed
Minister[Repealed, 1999, c. 28, s. 76]
2(1)[p24]
official gazette means the Canada Gazette and the gazette published under the authority of the government of the province where the proceedings for the winding-up of the business of a company are carried on, or used as the official means of communication between the lieutenant governor of that province and the people, and if no such gazette is published in the province, any newspaper published in the province and designated by a court for publishing the notices required by this Act; (gazette officielle)
2(1)[p25]
Superintendent means the Superintendent of Financial Institutions appointed pursuant to subsection 5(1) of the Office of the Superintendent of Financial Institutions Act and a reference to the “Office of the Superintendent” shall be construed as a reference to the office established by section 4 of that Act; (surintendant)
2(1)[p26]
trading company means any company, except a railway or telegraph company, carrying on business similar to that carried on by apothecaries, auctioneers, bankers, brokers, brickmakers, builders, carpenters, carriers, cattle or sheep salesmen, coach proprietors, dyers, fullers, keepers of inns, taverns, hotels, saloons or coffee houses, lime burners, livery stable keepers, market gardeners, millers, miners, packers, printers, quarrymen, sharebrokers, ship-owners, shipwrights, stockbrokers, stock-jobbers, victuallers, warehousemen, wharfingers, persons using the trade of merchandise by way of bargaining, exchange, bartering, commission, consignment or otherwise, in gross or by retail, or by persons who, either for themselves, or as agents or factors for others, seek their living by buying and selling or buying and letting for hire goods or commodities, or by the manufacture, workmanship or t…
2(1)[p27]
winding-up order means an order granted by a court under this Act to wind up the business of a company, and includes any order granted by the court to bring under this Act any company in liquidation or in process of being wound up. (ordonnance de mise en liquidation)
2(2)Business in Canada
For the purposes of this Act, a reference to the business in Canada of an authorized foreign bank is deemed to be a reference to the business in Canada of the authorized foreign bank under Part XII.1 of the Bank Act.
2(3)Creditors
For the purposes of this Act, a reference to a creditor in respect of an authorized foreign bank is deemed to be a reference to a creditor of the authorized foreign bank in respect of its business in Canada.
3When company deemed insolvent
A company is deemed insolvent
3(a)
if it is unable to pay its debts as they become due;
3(b)
if it calls a meeting of its creditors for the purpose of compounding with them;
3(c)
if it exhibits a statement showing its inability to meet its liabilities;
3(d)
if it has otherwise acknowledged its insolvency;
3(e)
if it assigns, removes or disposes of, or attempts or is about to assign, remove or dispose of, any of its property, with intent to defraud, defeat or delay its creditors, or any of them;
3(f)
if, with the intent referred to in paragraph (e), it has procured its money, goods, chattels, land or property to be seized, levied on or taken, under or by any process of execution;
3(g)
if it has made any general conveyance or assignment of its property for the benefit of its creditors, or if, being unable to meet its liabilities in full, it makes any sale or conveyance of the whole or the main part of its stock in trade or assets without the consent of its creditors or without satisfying their claims;
3(h)
if it permits any execution issued against it, under which any of its goods, chattels, land or property are seized, levied on or taken in execution, to remain unsatisfied until within four days of the time fixed by the sheriff or other officer for the sale thereof, or for fifteen days after the seizure;
3(i)
if, in the case of a company that is a federal member institution, as defined in section 2 of the Canada Deposit Insurance Corporation Act, in respect of which an order has been made under paragraph 39.13(1)(a) of that Act but in respect of which no order has been made under subsection 39.13(1.3) of that Act, a notice has not been published under subsection 39.2(3) of that Act in respect of the institution on or before
3(i)(i)
the 60th day after the day on which the order was made under paragraph 39.13(1)(a) of that Act, or
3(i)(ii)
the day on which any extension of that period ends;
3(j)
if, in the case of a company that is a federal member institution, as defined in section 2 of the Canada Deposit Insurance Corporation Act, in respect of which an order has been made under paragraph 39.13(1)(b) of that Act but in respect of which no order has been made under subsection 39.13(1.3) of that Act, a notice has not been published under subsection 39.2(3) of that Act in respect of the institution on or before
3(j)(i)
the 60th day after the day on which the order was made under paragraph 39.13(1)(b) of that Act, or
3(j)(ii)
the day on which any extension of that period ends;
3(j.1)
if, in the case of a company that is a federal member institution, as defined in section 2 of the Canada Deposit Insurance Corporation Act, in respect of which an order has been made under paragraph 39.13(1)(d) or subsection 39.13(1.3) of that Act, a notice has not been published under subsection 39.2(3) of that Act in respect of the institution on or before
3(j.1)(i)
the day that is one year after the day on which the order is made under subsection 39.13(1) of that Act or any shorter period that is specified in the order made under paragraph 39.13(1)(d) or subsection 39.13(1.3) of that Act, as the case may be, or
3(j.1)(ii)
the day on which any extension of the applicable period ends; or
3(k)
if, in the case of a company that is a federal member institution, as defined in section 2 of the Canada Deposit Insurance Corporation Act, in respect of which the Canada Deposit Insurance Corporation has been appointed as receiver, a transfer of part of the business of the federal member institution to a bridge institution has been substantially completed.
4Company deemed unable to pay its debts
A company is deemed to be unable to pay its debts as they become due whenever a creditor, to whom the company is indebted in a sum exceeding two hundred dollars then due, has served on the company, in the manner in which process may legally be served on it in the place where service is made, a demand in writing, requiring the company to pay the sum due, and the company has, for sixty days next after the service of the demand, neglected to pay the sum or to secure or compound for the sum to the satisfaction of the creditor.
5Commencement of winding-up
The winding-up of the business of a company shall be deemed to commence at the time of the service of the notice of presentation of the petition for winding up.
6Application
6(1)
This Act applies to all corporations incorporated by or under the authority of an Act of Parliament, of the former Province of Canada or of the Province of Nova Scotia, New Brunswick, British Columbia, Prince Edward Island or Newfoundland and Labrador, and whose incorporation and affairs are subject to the legislative authority of Parliament, and to incorporate banks and savings banks, to authorized foreign banks, and to trust companies, insurance companies, loan companies having borrowing powers, building societies having a capital stock and incorporated trading companies doing business in Canada wherever incorporated where any of those bodies
6(1)(a)
is insolvent;
6(1)(b)
is in liquidation or in the process of being wound up and, on petition by any of its shareholders or creditors, assignees or liquidators — or , if it is a federal credit union, by any of its members, shareholders, creditors, assignees or liquidators — asks to be brought under this Act; or
6(1)(c)
if it is a financial institution, is under the control, or its assets are under the control, of the Superintendent and is the subject of an application for a winding-up order under section 10.1.
6(2)Application to authorized foreign banks
In its application to an authorized foreign bank, this Act only applies to the winding-up of its business in Canada and to the liquidation of its assets, and any reference to the winding-up of a company or to the winding-up of the business of a company is deemed, in relation to an authorized foreign bank, to be a reference to the winding-up of the business in Canada of the authorized foreign bank and to include the liquidation of the assets of the authorized foreign bank.
7Certain corporations excepted
This Act does not apply to building societies that do not have a capital stock or to railway or telegraph companies.
8Subject to Part II
In their application to authorized foreign banks, the provisions of this Part are subject to the provisions of Part II.
9Subject to Part III
In the case of insurance companies, the provisions of this Part are subject to the provisions of Part III.
10Cases where winding-up order may be made
A court may make a winding-up order in respect of a company
10(a)
where the period, if any, fixed for the duration of the company by the Act, charter or instrument of incorporation of the company has expired, or where an event, if any, has occurred, on the occurrence of which it is provided by the Act, charter or instrument of incorporation that the company is to be dissolved;
10(b)
if the company at a special meeting of shareholders — or, if the company is a federal credit union, at a special meeting of members or shareholders — called for the purpose has passed a resolution requiring the company to be wound up;
10(c)
when the company is insolvent;
10(d)
when the capital stock of the company is impaired to the extent of twenty-five per cent thereof, and when it is shown to the satisfaction of the court that the lost capital will not likely be restored within one year; or
10(e)
when the court is of opinion that for any other reason it is just and equitable that the company should be wound up.
10.1Other winding-up circumstances
If the Superintendent has taken control of a financial institution or of the assets of a financial institution under any of paragraphs 648(1)(b) or (1.11)(b) to (d) of the Bank Act, paragraph 442(1)(b) of the Cooperative Credit Associations Act, any of paragraphs 679(1)(b) or (1.21)(b) to (d) of the Insurance Companies Act or any of paragraphs 510(1)(b) or (1.11)(b) to (d) of the Trust and Loan Companies Act or, in the case of an authorized foreign bank, has taken control of its assets under paragraph 619(1)(b) or (2.1)(b) or (c) of the Bank Act or, in the case of a foreign insurance company, has taken control of its assets under subparagraph 679(1)(b)(i) or (ii) or paragraph 679(1.21)(b) or (c) of the Insurance Companies Act, a court may make a winding-up order in respect of the financial institution, authorized foreign bank or insurance business in Canada of the foreign insurance compa…
10.1(a)
a bank to which the Bank Act applies, the control was taken on a ground referred to in paragraph 648(1.1)(a), (c), (e) or (f) of that Act or for reasons related to national security;
10.1(a.1)
an authorized foreign bank, control of its assets was taken on a ground referred to in paragraph 619(2)(a), (b), (d) or (f) of the Bank Act or for reasons related to national security;
10.1(b)
a company to which the Trust and Loan Companies Act applies, the control was taken on a ground referred to in paragraph 510(1.1)(a), (c), (e) or (f) of that Act or for reasons related to national security;
10.1(c)
an insurance company to which the Insurance Companies Act applies, other than a foreign insurance company, the control was taken on a ground referred to in paragraph 679(1.1)(a), (c), (e) or (f) of that Act or for reasons related to national security;
10.1(d)
a foreign insurance company to which the Insurance Companies Act applies, the control of its assets was taken on a ground referred to in paragraph 679(1.2)(a), (c) or (e) of that Act or for reasons related to national security; or
10.1(e)
an association to which the Cooperative Credit Associations Act applies, the control was taken on a ground referred to in paragraph 442(1.1)(a), (c), (e) or (f) of that Act.
11Application for winding-up order
An application for a winding-up order may
11(a)
in the cases mentioned in paragraphs 10(a) and (b), be made by the company or by a shareholder of the company, or, if the company is a federal credit union, by a member or shareholder of the company;
11(b)
in the case mentioned in paragraph 10(c), be made by the company or by a creditor of the company for the sum of at least two hundred dollars or, except in the case of banks and insurance corporations, by a shareholder holding shares in the capital stock of the company to the amount of at least five hundred dollars par value, or holding five shares without nominal or par value in the capital stock of the company;
11(c)
in the cases mentioned in paragraphs 10(d) and (e), be made by a shareholder holding shares in the capital stock of the company to the amount of at least five hundred dollars par value, or holding five shares without nominal or par value in the capital stock of the company; and
11(d)
in the case mentioned in section 10.1, be made by the Attorney General of Canada.
12How and where made
12(1)
An application for a winding-up order may be made by petition to the court in the province where the head office of the company is situated or in the province where its chief place or one of its chief places of business in Canada is situated.
12(2)Notice of application
Except in cases where an application for a winding-up order is made by a company, four days notice of the application shall, unless otherwise directed by a court, be given to the company before the making of the application.
13Power of court
A court may, on application for a winding-up order, make the order applied for, dismiss the application with or without costs, adjourn the hearing conditionally or unconditionally or make any interim or other order that it deems just.
14Proceedings may be adjourned
If a company opposes an application for a winding-up order on the ground that it has not become insolvent, that its suspension or default was only temporary and was not caused by a deficiency in its assets, that its capital stock is not impaired to the extent described in paragraph 10(d), that the impairment does not endanger the capacity of the company to pay its debts in full or that there is a probability that its lost capital will be restored within a year or within a reasonable time thereafter, and shows reasonable cause for believing that its opposition is well founded, the court, in its discretion, may, from time to time, adjourn proceedings on the application, for a time not exceeding six months after the date of the application, and may order an accountant or other person to inquire into the affairs of the company and to report thereon within a period not exceeding thirty days a…
15Duty of company
On the service on the company of an order made under section 14 for an inquiry into the affairs of the company, the president, directors, officers and employees of the company and every other person shall respectively
15(a)
exhibit to the accountant or other person named for the purpose of making the inquiry the books of account of the company and all inventories, papers and vouchers referring to the business of the company or of any person therewith that are in their possession, custody or control; and
15(b)
give all such information as is required by the accountant or other person named for the purpose of making the inquiry in order to form a just estimate of the affairs of the company.
16Power of the court
On receiving the report of the accountant or person ordered to inquire into the affairs of the company under section 14, and after hearing such shareholders or creditors of the company, or, if the company is a federal credit union, such of its members, shareholders or creditors, as desire to be heard in respect of the report, the court may either refuse the application or make the winding-up order.
17Actions against company may be stayed
A court may, on the application of a company, or of any creditor, contributory, liquidator or petitioner for the winding-up order, at any time after the presentation of a petition for the order and before making the order, restrain further proceedings in any action, suit or proceeding against the company, on such terms as the court thinks fit.
18Court may stay winding-up proceedings
A court may, on the application of any creditor, contributory, liquidator or petitioner for the winding-up order, at any time after the order is made, and on proof, to the satisfaction of the court, that all proceedings in relation to the winding-up ought to be stayed, make an order staying those proceedings, either altogether or for a limited time, on such terms and subject to such conditions as the court thinks fit.
19Company to cease business
A company, from the time of the making of a winding-up order, shall cease to carry on its business, except in so far as is, in the opinion of the liquidator, required for the beneficial winding-up thereof, but the corporate state and all the corporate powers of the company, notwithstanding that it is otherwise provided by the Act, charter or instrument of incorporation of the company, continue until the affairs of the company are wound up.
20Transfer of shares void
All transfers of shares of a company referred to in section 19 — or, if the company referred to in that section is a federal credit union, all transfers of membership shares or shares — except transfers made to or with the sanction of the liquidator, under the authority of the court, and every alteration in the status of the members of the company, after the commencement of the winding-up, are void.
21Effect of winding-up order
After a winding-up order is made in respect of a company, no suit, action or other proceeding shall be proceeded with or commenced against the company, except with the leave of the court and subject to such terms as the court imposes.
22Execution, etc.
Every attachment, sequestration, distress or execution put in force against the estate or effects of a company after the making of a winding-up order is void.
22.1Permitted actions
22.1(1)
Nothing in this Act or an order made under this Act prevents or prohibits the following actions from being taken in accordance with the provisions of an eligible financial contract:
22.1(1)(a)
the termination of the contract;
22.1(1)(b)
the netting or setting off or compensation of obligations between a company in respect of which winding-up proceedings under this Act are commenced and another party to the contract; and
22.1(1)(c)
any dealing with financial collateral including
22.1(1)(c)(i)
the sale or foreclosure or, in the Province of Quebec, the surrender of financial collateral, and
22.1(1)(c)(ii)
the setting off or compensation of financial collateral or the application of the proceeds or value of financial collateral.
22.1(1.01)Net termination values
If the net termination values determined in accordance with the eligible financial contract referred to in subsection (1) are owed by the company to another party to the eligible financial contract, that other party is deemed to be a creditor of the company with a claim provable against the company in respect of the net termination values.
22.1(1.1)Application to authorized foreign banks
In its application to authorized foreign banks, subsection (1) only applies to the eligible financial contracts and obligations between the authorized foreign bank, in respect of its business in Canada, and another party.
22.1(2)Definitions
In subsection (1),
22.1(2)[p103]
eligible financial contract means an agreement of a prescribed kind; (contrat financier admissible)
22.1(2)[p104]
financial collateral means any of the following that is subject to an interest, or in the Province of Quebec a right, that secures payment or performance of an obligation in respect of an eligible financial contract or that is subject to a title transfer credit support agreement:
22.1(2)[p104](a)
cash or cash equivalents, including negotiable instruments and demand deposits,
22.1(2)[p104](b)
securities, a securities account, a securities entitlement or a right to acquire securities, or
22.1(2)[p104](c)
a futures agreement or a futures account; (garantie financière)
22.1(2)[p108]
net termination value means the net amount obtained after setting off the mutual obligations between the parties to an eligible financial contract in accordance with its provisions; (valeurs nettes dues à la date de résiliation)
22.1(2)[p109]
title transfer credit support agreement means an agreement under which title to property has been provided for the purpose of securing the payment or performance of an obligation in respect of an eligible financial contract. (accord de transfert de titres pour obtention de crédit)
22.1(3)Regulations
The Governor in Council may make regulations prescribing kinds of agreements for the purposes of the definition eligible financial contract in subsection (2).
22.2Repealed
[Repealed, 2012, c. 31, s. 423]
23Liquidator
23(1)
A court, in making a winding-up order in respect of a company, may appoint a liquidator or more than one liquidator of the estate and effects of the company.
23(2)Trustee under Bankruptcy and Insolvency Act
In the case of a company, except incorporated building societies and railway companies, a court shall not appoint as liquidator any person, other than the Canada Deposit Insurance Corporation, who is not licensed as a trustee under the Bankruptcy and Insolvency Act.
23(3)Superintendent not to be liquidator
The Superintendent shall not be appointed as a liquidator of a company.
24If more than one liquidator
If more than one liquidator is appointed, a court may
24(a)
direct whether any act to be done by a liquidator is to be done by all or any one or more of the liquidators; and
24(b)
allocate responsibilities among the liquidators or permit them to allocate responsibilities among themselves.
25Additional liquidators
A court may, if it thinks fit, after the appointment of one or more liquidators, appoint an additional liquidator or liquidators.
26Notice
Except as otherwise ordered by the court, no liquidator shall be appointed under subsection 23(1) unless a previous notice is given to the creditors, contributories and shareholders or members of the company, and the court shall by order direct the manner and form in which the notice shall be given and the length of the notice.
27Security
The court shall determine what security shall be given by a liquidator on his appointment.
28Provisional liquidator
A court may, on the presentation of a petition for a winding-up order or at any time thereafter and before the first appointment of a liquidator, appoint provisionally a liquidator of the estate and effects of the company and may limit and restrict his powers by the order appointing him.
29Incorporated company
An incorporated company may be appointed liquidator to the goods and effects of a company under this Act, and if an incorporated company is so appointed, it may act through one or more of its principal officers designated by the court.
30Trust company
Where under the laws of any province a trust company is accepted by the courts of that province and is permitted to act as administrator, assignee or curator without giving security, the trust company may be appointed liquidator of a company under this Act, without giving security.
31Powers of directors
On the appointment of a liquidator, all the powers of the directors of the company cease, except in so far as the court or the liquidator sanctions the continuance of those powers.
32Resignation and removal
A liquidator may resign or may be removed by the court on due cause shown, and every vacancy in the office of liquidator shall be filled by the court.
33Duties after appointment
A liquidator, on his appointment, shall take into his custody or under his control all the property, effects and choses in action to which the company is or appears to be entitled, and shall perform such duties with reference to winding-up the business of the company as are imposed by the court or by this Act.
34Liquidator to prepare statement
A liquidator shall, within 120 days after appointment, prepare a statement of the assets, debts and liabilities of the company and of the value of those assets as shown by the books and records of the company.
35Powers
35(1)
A liquidator may, with the approval of the court, and on such previous notice to the creditors, contributories, shareholders or members of the company as the court orders,
35(1)(a)
bring or defend any action, suit or prosecution or other legal proceeding, civil or criminal, in his own name as liquidator or in the name or on behalf of the company, as the case may be;
35(1)(b)
carry on the business of the company so far as is necessary to the beneficial winding-up of the company;
35(1)(c)
sell the real and personal property, effects and choses in action of the company, by public auction or private contract, and transfer the whole thereof to any person or company, or sell them in parcels for such consideration as may be approved by the court;
35(1)(d)
do all acts and execute, in the name and on behalf of the company, all deeds, receipts and other documents, and for that purpose use, when necessary, the seal of the company;
35(1)(e)
prove, rank, claim and draw dividends in the matter of the bankruptcy, insolvency or sequestration of any contributory, for any sum due the company from the contributory, and take and receive dividends in respect of the sum in the matter of the bankruptcy, insolvency or sequestration, as a separate debt due from that contributory and rateably with the other separate creditors;
35(1)(f)
draw, accept, make and endorse any bill of exchange or promissory note in the name and on behalf of the company;
35(1)(g)
raise on the security of the assets of the company any requisite sum or sums of money;
35(1)(h)
do and execute all such other things as are necessary for winding-up the affairs of the company and distributing its assets; and
35(1)(i)
enter into an agreement with any compensation association designated by order of the Minister of Finance pursuant to section 449 or 591 of the Insurance Companies Act in order to facilitate the payment of claims to policyholders and the preservation of the value of the estate.
35(1.1)Agreement provisions
An agreement referred to in paragraph (1)(i) may include provisions setting out the priority for repayment to the compensation association of amounts advanced by it to a company in accordance with the agreement.
35(2)Company liable
The drawing, accepting, making or endorsing of every bill of exchange or promissory note mentioned in subsection (1), on behalf of the company, has the same effect, with respect to the liability of the company, as if the bill or note had been drawn, accepted, made or endorsed by or on behalf of the company in the course of the carrying on of its business.
35(3)No delivery of assets needed
No delivery of the whole or of any part of the assets of the company is necessary to give a lien to any person taking security on the assets of the company.
35.1Liquidator not liable
A liquidator is not liable to any person if the liquidator relies in good faith on an opinion, report or statement of a compensation association regarding its financial obligations in relation to an agreement referred to in paragraph 35(1)(i).
36Appointment of solicitor
A liquidator may, with the approval of the court, appoint a solicitor or law agent to assist him in the performance of his duties.
37Debts due to the company
37(1)
A liquidator may, with the approval of the court, compromise all calls and liabilities to calls, debts and liabilities capable of resulting in debts, and all claims, demands and matters in dispute in any way relating to or affecting the assets of the company or the winding-up of the company, on the receipt of such sums, payable at such times, and generally on such terms, as are agreed on.
37(2)Security may be taken
A liquidator may take any security for the discharge of the calls, debts, liabilities, claims, demands or disputed matters referred to in subsection (1), and give a complete discharge in respect of all or any of those calls, debts, liabilities, claims, demands or matters.
38Creditors may be compromised
A liquidator may, with the approval of the court, make any compromise or arrangements that the liquidator considers appropriate with
38(a)
in the case of a company other than an authorized foreign bank, creditors or persons claiming to be creditors of the company; and
38(b)
in the case of an authorized foreign bank, creditors or persons claiming to be creditors of the authorized foreign bank or persons who hold security on its assets.
39Court may provide as to powers
A court may provide, by any order subsequent to a winding-up order, that a liquidator may exercise any of the powers conferred on him by this Act, without the sanction or intervention of the court.
40Repealed
[Repealed, 1996, c. 6, s. 149]
41Inspectors
A court may appoint, at any time when found advisable, one or more inspectors, whose duty it is to assist and advise a liquidator in the liquidation of a company.
42Remuneration
42(1)
A liquidator shall be paid such salary or remuneration, by way of percentage or otherwise, as the court directs, on such notice to the creditors, contributors, shareholders or members as the court orders.
42(2)Distribution
If there is more than one liquidator appointed for the liquidation of a company, the remuneration shall be distributed among them in such proportions as the court directs.
43Remuneration of inspectors
The court shall determine the remuneration, if any is deemed just, of inspectors.
44 to 47Repealed
[Repealed, 1996, c. 6, s. 150]
48If no liquidator
If at any time no liquidator has been appointed to wind up the business of a company, all the property of the company shall be deemed to be in the custody of the court.
49Provision for discharge of liquidator
49(1)
Whenever a company is being wound up and the realization and distribution of its assets has proceeded so far that in the opinion of the court it becomes expedient that the liquidator should be discharged, and that the balance remaining in his hands of the moneys and assets of the company can be better realized and distributed by the court, the court may make an order discharging the liquidator and for payment, delivery and transfer into court, or to such officer or person as the court may direct, of those moneys and assets, and the moneys and assets shall be realized and distributed, by or under the direction of the court, among the persons entitled thereto, in the same way, as nearly as may be, as if the distribution were being made by the liquidator.
49(2)Disposal of books and documents
In the case described in subsection (1), the court may make an order directing how the books, accounts and documents of the company and of the liquidator may be disposed of, and may order that they be deposited in court or otherwise dealt with as may be thought fit.
50List of contributories
As soon as possible after the commencement of the winding-up of a company, the court shall settle a list of contributories.
51Classes distinguished
In the list of contributories referred to in section 50, persons who are contributories in their own right shall be distinguished from persons who are contributories as representatives of or liable for the debts of others.
52Adding heirs to list
It is not necessary, where the personal representative of any deceased contributory is placed on a list of contributories, to add the heirs or devisees of the contributory, but the heirs or devisees may be added as and when the court thinks fit.
53Liability of shareholders
53(1)
Every shareholder or member of a company or his representative is liable to contribute the amount unpaid on his shares of the capital or on his liability to the company, or to its members or creditors, as the case may be, under the Act, charter or instrument of incorporation of the company, or otherwise.
53(2)Liability an asset
The amount that a shareholder is liable to contribute under subsection (1) shall be deemed an asset of the company, and a debt due to the company, payable as directed or appointed under this Act.
54Liability after transfer of shares
54(1)
Where a shareholder has transferred his shares under circumstances that do not, by law, free him from liability in respect thereof, or where he is by law liable to the company or its members or creditors, as the case may be, to an amount beyond the amount unpaid on his shares, he shall be deemed a member of the company for the purposes of this Act and is liable to contribute, under subsection 53(1), to the extent of his liabilities to the company or its members or creditors, independently of this Act.
54(2)An asset
The amount that a shareholder is liable to contribute under subsection (1) shall be deemed an asset and a debt described in subsection 53(2).
55Liability of contributory a debt
The liability of any person to contribute to the assets of a company under this Act, in the event of the business of the company being wound up, creates a debt accruing due from that person at the time when his liability commenced, but payable at the time or respective times when calls are made, under this Act, for enforcing that liability.
56Provable against his estate
In the case of the bankruptcy or insolvency of any contributory, the estimated value of his liability to future calls, as well as calls already made, may be proved against his estate.
57Handing over money and books
A court may, at any time after making a winding-up order, require any contributory for the time being settled on the list of contributories as trustee, receiver, banker, agent or officer of the company, to pay, deliver, convey, surrender or transfer forthwith, or within such time as the court directs, to or into the hands of the liquidator, any sum or balance, books, papers, estate or effects that are in his hands for the time being, and to which the company appears to be entitled.
58Payment by contributory
A court may, at any time after making a winding-up order, make an order on any contributory for the time being settled on the list of contributories, directing payment to be made, in the manner mentioned in the order, of any moneys due from him or from the estate of the person whom he represents to the company, exclusive of any moneys that he or the estate of the person whom he represents is liable to contribute by virtue of any call made in pursuance of this Act.
59Calls on contributories
A court may, at any time after making a winding-up order, and either before or after it has ascertained the sufficiency of the assets of the company, make calls on and order payment thereof by all or any of the contributories for the time being settled on the list of contributories, to the extent of their liability, for payment of all or any sums it deems necessary to satisfy the debts and liabilities of the company, for the costs, charges and expenses of winding-up and for the adjustment of the rights of the contributories among themselves.
60Consideration of possible failure to pay
60(1)
A court may, in making a call, take into consideration the probability that some of the contributories on whom the call is made may partly or wholly fail to pay their respective portions of the call.
60(2)Maturity of debt
No call compels payment of a debt before the maturity thereof and the extent of the liability of any contributory is not increased by anything in this section.
61Order for payment
61(1)
A court may order any contributory, purchaser or other person from whom money is due to the company to pay the money into a bank or Government savings bank, to the account of the court instead of the liquidator.
61(2)Enforcement
An order under subsection (1) may be enforced in the same manner as if it had directed payment to the liquidator.
62Rights of contributories
The court shall adjust the rights of the contributories among themselves.
63Meetings
A court may, if it thinks expedient, direct meetings of the creditors, contributories, shareholders or members of a company to be summoned, held and conducted in such manner as the court directs, for the purpose of ascertaining their wishes, and may appoint a person to act as chairman of any of those meetings, and to report the result of those meetings to the court.
64Votes according to amount of claim
64(1)
In the case described in section 63, regard shall, with respect to creditors, be had as to the amount of the debt due to each creditor and with respect to shareholders or members, as to the number of votes conferred on each shareholder or member by law or by the regulations of the company.
64(2)Preliminary proof
The court may prescribe the mode of preliminary proof of creditors’ claims for the purpose of any meeting directed to be held under section 63.
65Court may summon creditors to consider any proposed compromise
Where any compromise or arrangement is proposed between a company in the course of being wound up under this Act and the creditors of the company, or by and between any of those creditors or any class or classes of those creditors and the company or is proposed by the liquidator, the court, in addition to any other of its powers, may, on the application, in a summary way, of any creditor or of the liquidator, order that a meeting of those creditors or class or classes of creditors be summoned in such manner as the court shall direct.
66Sanction of compromise
If a majority in number, representing three-fourths in value, of the creditors or class or classes of creditors referred to in section 65, present either in person or by proxy at the meeting summoned under that section, agree to any arrangement or compromise, the arrangement or compromise may be sanctioned by an order of the court, and in such case is binding on all the creditors or on the class or classes of creditors, as the case may be, and also on the liquidator and contributories of the company.
67Chairman of meeting
In directing meetings of creditors, contributories, shareholders or members of a company to be held as provided in this Act, the court may either appoint a person to act as chairman of the meeting or direct that a chairman be appointed by the persons entitled to be present at the meeting, and, in the event the appointed chairman fails to attend the meeting, the persons present at the meeting may elect a qualified person as chairman who shall perform the duties prescribed by this Act.
68Voting to be in person or by proxy
No creditor, contributory, shareholder or member of a company shall vote at any meeting unless present personally or represented by a person acting under a written authority, filed with the chairman or liquidator, to act as the representative at the meeting, or generally.
69 and 70Repealed
[Repealed, 1996, c. 6, s. 152]
71What debts may be proved
71(1)
When the business of a company is being wound up under this Act, all debts and all other claims against the company in existence at the commencement of the winding-up, certain or contingent, matured or not, and liquidated or unliquidated, are admissible to proof against the company and, subject to subsection (2), the amount of any claim admissible to proof is the unpaid debt or other liability of the company outstanding or accrued at the commencement of the winding-up.
71(2)Uncertain claims valued
In case of any claim subject to any contingency or for unliquidated damages or which for any other reason does not bear a certain value, the court shall determine the value of the claim and the amount for which it shall rank.
72Claims of clerks and employees privileged
Clerks or other persons in, or having been in the employment of, a company, in or about its business or trade, shall be collocated in the dividend sheet by special privilege over other creditors, for any arrears of salary or wages due and unpaid to them at the time of the making of a winding-up order in respect of the company, not exceeding the arrears that have accrued to them during the three months immediately preceding the date of that order.
73Law of set-off to apply
73(1)
The law of set-off, as administered by the courts, whether of law or equity, applies to all claims on the estate of a company, and to all proceedings for the recovery of debts due or accruing due to a company at the commencement of the winding-up of the company, in the same manner and to the same extent as if the business of the company was not being wound up under this Act.
73(2)Trust money
For greater certainty, where the business of a trust company is being wound up under this Act, the law of set-off applies in respect of all moneys received or held by the company as deposits, without regard to whether those moneys are considered to be received or held by it in a trustee-beneficiary relationship.