Bill C-221

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First Reading

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	1st Session, 36th Parliament, 46 Elizabeth II, 1997
	The House of Commons of Canada
	BILL C-221
	An Act to amend the Canada Business Corporations Act
R.S., c. C-44; R.S., c. 27 (1st Supp.), c. 27 (2nd Supp.), c. 1 (4th Supp.); 1990, c. 17; 1991, cc. 45, 46, 47; 1992, cc. 1, 27, 51; 1993, c. 28; 1994, cc. 21, 24; 1996, cc. 6, 10	Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:
	*1. Subsection 123(4) of the Canada Busi ness Corporations Act* is replaced by the following:**
Defence of due diligence	(4) A director is not liable under section 118, 119 or 122 if the director has exercised the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances to prevent the wrongful act.
Factors to be considered by the court	(5) The court shall, in determining whether a director has, for the purposes of subsection (4), exercised the care, diligence and skill described in that subsection, consider, among other things, whether the director relied in good faith on
	(a) financial statements of the corporation represented to the director by an officer of the corporation or in a written report of the auditor of the corporation fairly to reflect the financial condition of the corporation; or
	(b) a report of any person, including a lawyer, accountant, engineer or appraiser whose profession lends credibility to a statement made by that person .
	2. The Act is amended by adding the following after section 123:
Due diligence defence extended to other Acts of Parliament	123.1 Where any Act of Parliament im poses liability on any person by virtue of the fact that the person is the director of a body corporate, and the Act does not contain a provision that the person is not liable under the provision of the Act that imposes the liability, if the person exercised the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances to pre vent the wrongful act, that Act is deemed to contain such a provision.