BILL C-5 - First Reading

	(r) directing a special audit or an investiga tion under section 329; or
	(s) requiring the trial of an issue.
Duty of directors and members	(4) If an order made under this section directs an amendment of the articles or by-laws of a cooperative,
	(a) the directors, members and shareholders must comply with subsection 303(5); and
	(b) no other amendment to the articles or by-laws may be made without the consent of the court, until the court orders other wise.
Exclusion	(5) A member or shareholder is not entitled to dissent under section 302 if an amendment to the articles is effected under this section.
Limitation	(6) No cooperative may make a payment to a member or shareholder under an order of the court if there are reasonable grounds to believe that
	(a) the cooperative is, or would after that payment be, unable to pay its liabilities as they become due; or
	(b) the realizable value of the cooperative's assets after the payment would be less than the total of
	(i) its liabilities, and
	(ii) the amount that would be required to pay the holders of securities who have a right to be paid, on a redemption or liquidation, rateably with or in priority to the holders of the securities to be pur chased or redeemed.
Alternate order	(7) An applicant under this section may apply for an order under section 313 instead of the order under this section.
Evidence of member or shareholder approval not decisive	341. (1) No application made and no action brought or intervened in under this Part is to be stayed or dismissed by reason only that it is shown that an alleged breach of a right or duty owed to the cooperative or any of its subsid iaries has been or may be approved by the members or shareholders, but evidence of approval by the members or shareholders must be taken into account by the court in making an order under section 313 or this Part.
Court approval to discontinue	(2) No application made and no action brought or intervened in under this Part is to be stayed, discontinued, settled or dismissed for want of prosecution without the approval of the court given on any terms that the court considers appropriate.
Notice	(3) If the court determines that the interests of a complainant may be substantially af fected by a stay, discontinuance, settlement or dismissal mentioned in subsection (2), the court may order any party to the application or action to give notice of the application or action to the complainant.
No security for costs	(4) A complainant is not required to give security for costs in an application made or action brought or intervened in under this Part.
Interim costs	(5) In an application made or an action brought or intervened in under this Part, the court may at any time order the cooperative or its subsidiary to pay to the complainant interim costs, including legal fees and dis bursements, but the complainant may be held accountable for any interim costs so paid on the final disposition of the application or action.
Application to court to rectify records	342. (1) If the name of a person is alleged to be or to have been wrongly entered or retained in or wrongly deleted or omitted from the registers or other records of a cooperative, the cooperative, a security holder of the coopera tive or any aggrieved person may apply to the court for an order that the registers or records be rectified.
Power of court	(2) On an application made under this section, the court may make any order it considers appropriate, including an order
	(a) requiring the registers or records of the cooperative to be rectified;
	(b) restraining the cooperative from calling or holding a meeting or allocating or paying a dividend or interest on shares or a patronage refund before rectification of the registers or records;
	(c) determining the right of a party to the proceedings to have the party's name entered or retained in or deleted or omitted from the registers or records of the coopera tive, whether the issue arises between two or more members or security holders, or alleged members or security holders, or between the cooperative and a member or security holder or alleged member or secu rity holder; or
	(d) compensating a party who has incurred a loss by reason of the wrongful entry, retention, deletion or omission.
Application for directions	343. The Director may apply to a court for directions in respect of any matter concerning the Director's duties under this Act and, on the application, the court may give any directions that it thinks fit.
Notice of refusal by Director	344. (1) The Director must file all docu ments that are required to be sent to him or her under this Act. If the Director refuses to file any of those documents, the Director must, no later than twenty days after the later of the receipt of the document and the receipt of any approval that may be required under any other law, give written notice of the refusal to the person who sent the document, giving reasons for the refusal.
Deemed refusal	(2) If the Director does not file or give written reasons of refusal to file the docu ments within the twenty days provided for in subsection (1), the Director is deemed to have refused to file the document.
Appeal from Director's decision	345. A person who feels aggrieved by a decision of the Director referred to in any of paragraphs (a) to (f) may apply to a court for an order, including an order requiring the Director to change the decision:
	(a) to refuse to file in the form submitted any articles or other documents required by this Act to be sent;
	(b) to give a name, change or revoke a name or refuse to reserve, accept, change or revoke a name under this Act;
	(c) to refuse to grant an exemption that may be granted under this Act and the regula tions;
	(d) to refuse to issue a certificate of discontinuance;
	(e) to issue, or refuse to issue, a certificate of revival or the decision with respect to the terms for revival imposed by the Director; or
	(f) to dissolve a cooperative under section 311.
Restraining or compliance order	346. If a cooperative or any director, officer, employee, agent, auditor, trustee, receiver, receiver-manager or liquidator of a coopera tive does not comply with the Act, the regulations, the articles, the by-laws or a unanimous agreement, a complainant or the Director may, in addition to any other right, apply to a court for an order directing any such person to comply with or restraining them from acting in breach of it. On the application, the court may order compliance and make any further order it thinks fit.
Summary application to court	347. When this Act states that a person may apply to a court, the application may be made in any summary manner by petition, originat ing notice of motion or otherwise as the rules of court provide and subject to any order respecting notice to interested parties or costs or any other order the court thinks fit.
Appeal of final order	348. (1) An appeal lies to the court of appeal of a province from any final order made by a court of that province under this Act.
Appeal on leave	(2) An appeal lies to the court of appeal of a province from any other order made by a court of that province, only with leave of the court of appeal in accordance with the rules of that court.
Offences with respect to this Act	349. (1) Every person who knowingly contravenes section 31, 32 or 33, subsection 165(1), section 166, 168, 169, 172 or 251, subsection 260(2), 264(1) or (3) or 272(5), section 325 or 335 or any other provision of this Act or who does not fulfil a duty imposed under this Act is guilty of an offence punish able on summary conviction.
Offences with respect to the regulations	(2) Every person who, without reasonable cause, contravenes a provision of the regula tions or does not fulfil a duty imposed by the regulations is guilty of an offence punishable on summary conviction.
Offences with respect to reports	(3) A person is guilty of an offence punish able on summary conviction if the person knowingly makes or assists in making a report, return, notice or other document required by this Act or the regulations to be sent to the Director or to any other person that
	(a) contains an untrue statement of a material fact; or
	(b) omits to state a material fact required in it or necessary to make a statement con tained in it not misleading in the light of the circumstances in which it was made.
Order to comply	350. (1) If a person is guilty of an offence under this Act or the regulations, the court in which proceedings in respect of the offence are taken may, in addition to any punishment it may impose, order the person to comply with the provisions of this Act or the regula tions for the contravention of which the person has been convicted.
Limitation period	(2) A prosecution of an offence under this Act may be instituted at any time within but not later than two years after the time when the subject-matter of the complaint arose.
Civil remedy not affected	(3) No civil remedy for an act or omission is suspended or affected by reason that the act or omission is an offence under this Act.
Alternative resolution	351. The Minister of Agriculture and Agri- Food may, in accordance with any regulations, provide assistance with respect to the alterna tive resolution of any dispute relating to the affairs of a cooperative.
	PART 20
	ADDITIONAL PROVISIONS RESPECTING NON-PROFIT HOUSING COOPERATIVES
Application	352. This Part applies to cooperatives for which articles are issued to carry on business as non-profit housing cooperatives.
Requirement of articles	353. The articles of a non-profit housing cooperative must provide that
	(a) the name of the non-profit housing cooperative include the words ``non-prof it'', ``not-for-profit'', ``not for profit'', ``sans but lucratif'' or ``à but non lucratif'' and ``housing cooperative'', ``housing co- operative'', ``housing co-op'', ``coopéra tive d'habitation'', ``coop d'habitation'', ``co-op d'habitation'', ``coopérative de logement'', ``coop de logement'' or ``co-op de logement''; and
	(b) the business of the cooperative is restricted to that of primarily providing housing to its members.
Special limitations	354. The following restrictions apply to a non-profit housing cooperative:
	(a) it may not issue investment shares;
	(b) it may only issue membership shares on a par-value basis;
	(c) it must in each year conduct at least fifty per cent of its business with its members;
	(d) subject to subsection 357(2), its business must be carried on without the purpose of gain for its members; and
	(e) on its dissolution, and after the payment of its liabilities, its remaining property is to be transferred to or distributed among one or more non-profit housing cooperatives, cooperatives incorporated in a province that have similar objectives and limitations, or charitable organizations.
By-laws	355. (1) The by-laws of a non-profit hous ing cooperative must include
	(a) any obligation of a member to provide capital to the cooperative and the manner in which the capital is to be contributed;
	(b) any obligation of a member to contrib ute to charges of the cooperative and the manner in which the charges are to be determined and paid;
	(c) the procedure for determining disputes between members and between members and the cooperative;
	(d) subject to subsection (2), the manner in which the membership of a member may be terminated;
	(e) the manner in which a member's equity is to be determined on the member's withdrawal from the cooperative, or on the termination of their membership and on a dissolution of the cooperative and the manner in which that equity is to be repaid;
	(f) a provision for the establishment of adequate reserves and the maintenance of adequate insurance to protect the coopera tive from loss; and
	(g) a provision for the establishment of the rules governing charges by the cooperative for the occupation, leasing, subletting and subleasing of housing units of the coopera tive.
Termination of membership	(2) If the by-laws provide that membership is to be terminated by the directors, the by-laws must include a right of appeal to the members. Despite section 40, the by-laws may require that an appeal from the decision of the directors may only be launched within seven days after the member receives notice of the termination of membership.
Other provisions in by-laws	(3) The by-laws of a non-profit housing cooperative may provide
	(a) the rules by which the directors may establish a system of providing subsidies to members for housing charges, provided that the administration of the rules by the directors is fair as among the members; and
	(b) any rules in addition to those specified in paragraph (1)(g) relating to the occupan cy of a housing unit of the cooperative.
Member occupancy rights	356. (1) A person who is a member is entitled to occupy the housing unit allocated to them by the non-profit housing cooperative while they are a member, although the direc tors may, subject to the by-laws, by notice, require the member to occupy an alternate housing unit.
Appeal	(2) A member to whom a notice has been given by the cooperative to occupy an alter nate housing unit may appeal that decision in the same manner as that provided for appeals of decisions by the directors to terminate the membership of a member.
Unsuccessful appeal	(3) If an appeal by the member is not successful and the member does not relocate to the alternate housing unit within the time provided by the directors, their membership is deemed to have been terminated and despite section 40 and subsection 356(4), the member has no further appeal.
Occupancy during appeal	(4) Despite section 40, if, in accordance with the by-laws, the directors terminate a member's membership and the member ap peals the termination, the member has the right to occupy the housing unit allocated to them until the termination has been confirmed by the members.
Confirmation on appeal	(5) A decision of the directors to terminate the membership of a member is confirmed if the members, at a duly called meeting of the members, do not reverse the directors' deci sion.
Deemed confirmation	(6) If a meeting of the members is duly called to consider the appeal of a terminated member and a quorum of members is not available for the meeting, the decision of the directors is deemed to be confirmed.
Regaining possession of unit	(7) If a member's membership has been terminated and the member no longer has the right to occupy a housing unit of the coopera tive, the cooperative regains possession of the housing unit by consent or by appropriate legal proceedings.
Compensa- tion for occupation past termination date	(8) The cooperative is entitled to compensa tion for a housing unit that is occupied by a terminated member until it is vacated.
Cooperative not to take other property	(9) The cooperative may not take the property of a member to satisfy amounts due to the cooperative except by consent or by legal proceedings.
Inclusion in by-laws	(10) For the purpose of section 16, the provisions of this section must be included in the by-laws of a non-profit housing coopera tive.
Non-profit requirements	357. (1) Subject to subsection (2), but despite any other provision of this Act, a non-profit housing cooperative may not dis tribute or pay any of its assets to a member.
Permitted payments	(2) The cooperative may pay a member
	(a) dividends on membership shares paid at a rate that is not more than eight per cent per year and interest on member loans at a rate that is not more than ten per cent per year;
	(b) if the member withdraws from the cooperative or their membership in the cooperative is terminated, or on the dissolu tion of the cooperative, a sum equal to the member's investment in membership shares or member loans; and
	(c) a reasonable amount for property or services provided by the member to the cooperative.
No other payments permitted	(3) No person may pay or accept compensa tion for the withdrawal from membership of a member of a non-profit housing cooperative or for any person giving up possession of a housing unit of the cooperative, except as is provided in subsection (2).

PART 20

ADDITIONAL PROVISIONS RESPECTING NON-PROFIT HOUSING COOPERATIVES