Bill S-10

53 ELIZABETH II

——————

CHAPTER 25

A second Act to harmonize federal law with the civil law of the Province of Quebec and to amend certain Acts in order to ensure that each language version takes into account the common law and the civil law

[Assented to 15th December, 2004]

Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:

SHORT TITLE

1. This Act may be cited as the Federal Law–Civil Law Harmonization Act, No. 2.

PART 1

AMENDMENTS TO CERTAIN ACTS

Animal Pedigree Act

2. Subsection 13(2) of the Animal Pedigree Act is replaced by the following:

(2) Subject to any by-laws providing for the remuneration of its directors, officers and employees, and its agents or mandataries, all profits or accretions of value to the property of an association shall be used in furtherance of the purpose of the association, and no part of the property or profits of the association may be distributed, directly or indirectly, to any member of the association.

3. Subsection 39(2) of the Act is replaced by the following:

(2) Subject to any by-laws providing for the remuneration of the Corporation’s directors, officers and employees, and its agents or mandataries, all profits or accretions of value to the property of the Corporation shall be used in furtherance of the purpose of the Corporation, and no part of the property or profits of the Corporation may be distributed, directly or indirectly, to any member of the Corporation.

4. Paragraph 43(1)(d) of the Act is replaced by the following:

(d) respecting the appointment, remuneration, powers, functions and duties of employees, and agents or mandataries, of the Corporation;

Bank of Canada Act

5. Subsection 4(2) of the English version of the Bank of Canada Act is replaced by the following:

(2) The Bank may establish branches and agencies and appoint agents or mandataries in Canada and may also, with the approval of the Governor in Council, establish branches and appoint agents or mandataries elsewhere than in Canada.

6. Paragraph 18(m) of the English version of the Act is replaced by the following:

(m) open accounts in a central bank in any other country or in the Bank for International Settlements, accept deposits from central banks in other countries, the Bank for International Settlements, the International Monetary Fund, the International Bank for Reconstruction and Development and any other official international financial organization, act as agent or mandatary, or depository or correspondent for any of those banks or organizations, and pay interest on any of those deposits;

Bankruptcy and Insolvency Act

7. (1) Subsection 2(1) of the Bankruptcy and Insolvency Act is renumbered as section 2.

(2) The definition “biens” in section 2 of the French version of the Act is repealed.

(3) The definition “sheriff” in section 2 of the English version of the Act is repealed.

(4) The definition “bankrupt” in section 2 of the Act is replaced by the following:

“bankrupt” means a person who has made an assignment or against whom a bankruptcy order has been made or the legal status of that person;

(5) The definition “property” in section 2 of the English version of the Act is replaced by the following:

“property” means any type of property, whether situated in Canada or elsewhere, and includes money, goods, things in action, land and every description of property, whether real or person­al, legal or equitable, as well as obligations, easements and every description of estate, interest and profit, present or future, vested or contingent, in, arising out of or incident to property;

(6) Paragraphs (d) and (e) of the definition “date of the initial bankruptcy event” in section 2 of the Act are replaced by the following:

(d) the first application for a bankruptcy order against the person, in any case

(i) referred to in paragraph 50.4(8)(a) or 57(a) or subsection 61(2), or

(ii) in which a notice of intention to make a proposal has been filed under section 50.4 or a proposal has been filed under section 62 in respect of the person and the person files an assignment before the court has approved the proposal, or

(e) the application in respect of which a bankruptcy order is made, in the case of an application other than one referred to in paragraph (d);

(7) Section 2 of the Act is amended by adding the following in alphabetical order:

“legal counsel” means any person qualified, in accordance with the laws of a province, to give legal advice;

(8) Section 2 of the English version of the Act is amended by adding the following in alphabetical order:

“application”, with respect to a bankruptcy application filed in a court in the Province of Quebec, means a motion;

“executing officer” includes a sheriff, a bailiff and any officer charged with the execution of a writ or other process under this Act or any other Act or proceeding with respect to any property of a debtor;

(9) Section 2 of the French version of the Act is amended by adding the following in alphabetical order:

(10) Subsection 2(2) of the Act is repealed.

8. Paragraph 2.1(a) of the Act is replaced by the following:

(a) the granting of a bankruptcy order against the person;

9. Paragraph 4(3)(c) of the French version of the Act is replaced by the following:

10. (1) Subsection 10(1) of the French version of the Act is replaced by the following:

(2) Subsection 10(3) of the Act is replaced by the following:

(3) If, on the application of the Superintendent or the Superintendent’s authorized representative, a subpoena has been issued by the court, the Superintendent may, for the purpose of an investigation under subsection (1), examine or cause to be examined under oath before the registrar of the court or other authorized person, the debtor, any person who the Superintendent suspects, on reasonable grounds, has knowledge of the affairs of the debtor, or any person who is or has been an agent or a mandatary, or a clerk, a servant, an officer, a director or an employee of the debtor, with respect to the conduct, dealings and transactions of the debtor, the causes of the bankruptcy or insolvency of the debtor, and the disposition of the property of the debtor, and may order any person liable to be so examined to produce any books, records, papers or documents in the person’s possession or under the control of the person relating to the debtor and the conduct, dealings and transactions of the debtor, the causes of the bankruptcy or insolvency of the debtor or the disposition of the debtor’s property.

(3) Subsection 10(4) of the French version of the Act is replaced by the following:

11. Subsection 11(2) of the French version of the Act is replaced by the following:

12. Subsection 13.2(7) of the Act is replaced by the following:

(7) If a licence ceases to be valid by virtue of subsection (3) or is suspended or cancelled under subsection (5), the Superintendent may impose on the trustee any requirements that the Superintendent considers appropriate, including a requirement that the trustee provide security for the protection of an estate.

13. (1) Subparagraph 13.3(1)(a)(iv) of the English version of the Act is replaced by the following:

(iv) the auditor, accountant or legal counsel, or a partner or an employee of the auditor, accountant or legal counsel, of the debtor; or

(2) Subparagraphs 13.3(1)(b)(i) and (ii) of the Act are replaced by the following:

(i) the trustee under a trust indenture issued by the debtor or any person related to the debtor, or the holder of a power of attorney under an act constituting a hypothec within the meaning of the Civil Code of Québec that is granted by the debtor or any person related to the debtor, or

(ii) related to the trustee, or the holder of a power of attorney, referred to in subparagraph (i).

14. Subsection 13.4(1) of the English version of the Act is replaced by the following:

13.4 (1) No trustee shall, while acting as the trustee of an estate, act for or assist a secured creditor of the estate to assert any claim against the estate or to realize or otherwise deal with the security that the secured creditor holds, unless the trustee has obtained a written opinion of a legal counsel who does not act for the secured creditor that the security is valid and enforceable as against the estate.

15. Section 14 of the Act is replaced by the following:

14. The creditors may, at any meeting by special resolution, appoint or substitute another licensed trustee for the trustee named in an assignment, a bankruptcy order or a proposal, or otherwise appointed or substituted.

16. (1) Subsection 14.06(1) of the Act is replaced by the following:

14.06 (1) No trustee is bound to assume the duties of trustee in matters relating to assignments, bankruptcy orders or proposals, but having accepted an appointment in relation to those matters the trustee shall, until discharged or another trustee is appointed in the trustee’s stead, perform the duties required of a trustee under this Act.

(2) Paragraph 14.06(2)(b) of the Act is replaced by the following:

(b) after the trustee’s appointment unless it is established that the condition arose or the damage occurred as a result of the trustee’s gross negligence or wilful misconduct or, in the Province of Quebec, the trustee’s gross or intentional fault.

(3) Subparagraph 14.06(4)(a)(ii) of the Act is replaced by the following:

(ii) on notice to the person who issued the order, abandons, disposes of or otherwise releases any interest in any real property, or any right in any immovable, affected by the condition or damage;

(4) Paragraph 14.06(4)(c) of the Act is replaced by the following:

(c) if the trustee had, before the order was made, abandoned or renounced or been divested of any interest in any real property, or any right in any immovable, affected by the condition or damage.

(5) Subsections 14.06(6) to (8) of the Act are replaced by the following:

(6) If the trustee has abandoned or renounced any interest in any real property, or any right in any immovable, affected by the environmental condition or environmental damage, claims for costs of remedying the condition or damage shall not rank as costs of administration.

(7) Any claim by Her Majesty in right of Canada or a province against the debtor in a bankruptcy, proposal or receivership for costs of remedying any environmental condition or environmental damage affecting real property or an immovable of the debtor is secured by security on the real property or immovable affected by the environmental condition or environmental damage and on any other real property or immovable of the debtor that is contiguous with that real property or immovable and that is related to the activity that caused the environmental condition or environmental dam­age, and the security

(a) is enforceable in accordance with the law of the jurisdiction in which the real property or immovable is located, in the same way as a mortgage, hypothec or other security on real property or immovables; and

(b) ranks above any other claim, right, charge or security against the property, despite any other provision of this Act or anything in any other federal or provincial law.

(8) Despite subsection 121(1), a claim against a debtor in a bankruptcy or proposal for the costs of remedying any environmental condition or environmental damage affecting real property or an immovable of the debtor shall be a provable claim, whether the condition arose or the damage occurred before or after the date of the filing of the proposal or the date of the bankruptcy.

17. Section 15.1 of the French version of the Act is replaced by the following:

18. (1) Subsections 16(1) and (2) of the Act are replaced by the following:

16. (1) Every trustee duly appointed shall, as soon as they are appointed, give security in cash or by bond or suretyship of a guaranty company satisfactory to the official receiver for the due accounting for, the payment and the transfer of all property received by the trustee as trustee and for the due and faithful performance of the trustee’s duties.

(2) The security required to be given under subsection (1) shall be given to the official receiver in favour of the creditors generally and may be enforced by any succeeding trustee or by any one of the creditors on behalf of all by direction of the court, and may be increased or reduced by the official receiver.

(2) Subsection 16(3) of the English version of the Act is replaced by the following:

(3) The trustee shall, as soon as possible, take possession of the deeds, books, records and documents and all property of the bankrupt and make an inventory, and for the purpose of making an inventory the trustee is entitled to enter, subject to subsection (3.1), on any premises on which the deeds, books, records, documents or property of the bankrupt may be, even if they are in the possession of an executing officer, a secured creditor or other claimant to them.

19. Subsection 19(1) of the French version of the Act is replaced by the following:

20. Subsection 20(1) of the Act is replaced by the following:

20. (1) The trustee may, with the permission of the inspectors, divest all or any part of the trustee’s right, title or interest in any real property or immovable of the bankrupt by a notice of quit claim or renunciation by the trustee, and the official in charge of the land titles or registry office, as the case may be, where title to the real property or immovable is registered shall accept and register in the land register the notice when tendered for registration.

21. Subsection 26(3) of the Act is replaced by the following:

(3) The trustee shall permit the books, records and documents referred to in subsection (2) to be inspected and copies of them made by the Superintendent, the bankrupt or any creditor or their representative at any reasonable time.

22. (1) Paragraph 30(1)(b) of the Act is replaced by the following:

(b) lease any real property or immovable;

(2) Paragraph 30(1)(e) of the Act is replaced by the following:

(e) employ a barrister or solicitor or, in the Province of Quebec, an advocate, or employ any other representative, to take any proceedings or do any business that may be sanctioned by the inspectors;

(3) Paragraph 30(1)(g) of the Act is replaced by the following:

(g) incur obligations, borrow money and give security on any property of the bankrupt by mortgage, hypothec, charge, lien, assignment, pledge or otherwise, such obligations and money borrowed to be discharged or repaid with interest out of the property of the bankrupt in priority to the claims of the creditors;

(4) Paragraph 30(1)(k) of the Act is replaced by the following:

(k) elect to retain for the whole part of its unexpired term, or to assign, surrender, disclaim or resiliate any lease of, or other temporary interest or right in, any property of the bankrupt; and

23. Paragraph 36(2)(d) of the Act is replaced by the following:

(d) if required by the inspectors, register a notice of the appointment in the land register of any land titles or registry office where the assignment or bankruptcy order has been registered; and

24. Subsection 38(2) of the French version of the Act is replaced by the following:

25. (1) Subsection 41(4) of the Act is replaced by the following:

(4) When a trustee’s accounts have been approved by the inspectors and taxed by the court and all objections, applications, oppositions, motions and appeals have been settled or disposed of and all dividends have been paid, the estate is deemed to have been fully administered.

(2) Subsection 41(9) of the French version of the Act is replaced by the following:

26. The heading of Part II of the Act is replaced by the following:

BANKRUPTCY ORDERS AND ASSIGNMENTS

27. (1) Paragraph 42(1)(b) of the Act is replaced by the following:

(b) if in Canada or elsewhere the debtor makes a fraudulent gift, delivery or transfer of the debtor’s property or of any part of it;

(2) Paragraph 42(1)(c) of the English version of the Act is replaced by the following:

(c) if in Canada or elsewhere the debtor makes any transfer of the debtor’s property or any part of it, or creates any charge on it, that would under this Act be void or, in the Province of Quebec, null as a fraudulent preference;

(3) Paragraph 42(1)(e) of the Act is replaced by the following:

(e) if the debtor permits any execution or other process issued against the debtor under which any of the debtor’s property is seized, levied on or taken in execution to remain unsatisfied until within five days after the time fixed by the executing officer for the sale of the property or for fifteen days after the seizure, levy or taking in execution, or if any of the debtor’s property has been sold by the executing officer, or if the execution or other process has been held by the executing officer for a period of fifteen days after written demand for payment without seizure, levy or taking in execution or satisfaction by payment, or if it is returned endorsed to the effect that the executing officer can find no property on which to levy or to seize or take, but if interpleader or opposition proceedings have been instituted with respect to the property seized, the time elapsing between the date at which the proceedings were instituted and the date at which the proceedings are finally disposed of, settled or abandoned shall not be taken into account in calculating the period of fifteen days;

(4) Paragraph 42(1)(g) of the French version of the Act is replaced by the following:

(5) Subsection 42(2) of the English version of the Act is replaced by the following:

(2) Every assignment of an insolvent debtor’s property other than an assignment autho­rized by this Act, made by an insolvent debtor for the general benefit of their creditors, is void or, in the Province of Quebec, null.

28. The heading before section 43 and sections 43 to 45 of the Act are replaced by the following:

Application for Bankruptcy Order

43. (1) Subject to this section, one or more creditors may file in court an application for a bankruptcy order against a debtor if it is alleged in the application that

(a) the debt or debts owing to the applicant creditor or creditors amount to one thousand dollars; and

(b) the debtor has committed an act of bankruptcy within the six months preceding the filing of the application.

(2) If the applicant creditor referred to in subsection (1) is a secured creditor, they shall in their application either state that they are willing to give up their security for the benefit of the creditors, in the event of a bankruptcy order being made against the debtor, or give an estimate of the value of the applicant creditor’s security, and in the latter case they may be admitted as an applicant creditor to the extent of the balance of the debt due to them after deducting the value so estimated, in the same manner as if they were an unsecured creditor.

(3) The application shall be verified by affidavit of the applicant or by someone duly authorized on their behalf having personal knowledge of the facts alleged in the application.

(4) If two or more applications are filed against the same debtor or against joint debtors, the court may consolidate the proceedings or any of them on any terms that the court thinks fit.

(5) The application shall be filed in the court having jurisdiction in the judicial district of the locality of the debtor.

(6) At the hearing of the application, the court shall require proof of the facts alleged in the application and of the service of the application, and, if satisfied with the proof, may make a bankruptcy order.

(7) If the court is not satisfied with the proof of the facts alleged in the application or of the service of the application, or is satisfied by the debtor that the debtor is able to pay their debts, or that for other sufficient cause no order ought to be made, it shall dismiss the application.

(8) If there are more respondents than one to an application, the court may dismiss the application with respect to one or more of them, without prejudice to the effect of the application as against the other or others of them.

(9) On a bankruptcy order being made, the court shall appoint a licensed trustee as trustee of the property of the bankrupt, having regard, as far as the court considers just, to the wishes of the creditors.

(10) If the debtor appears at the hearing of the application and denies the truth of the facts alleged in the application, the court may, instead of dismissing the application, stay all proceedings on the application on any terms that it may see fit to impose on the applicant as to costs or on the debtor to prevent alienation of the debtor’s property and for any period of time that may be required for trial of the issue relating to the disputed facts.

(11) The court may for other sufficient reason make an order staying the proceedings under an application, either altogether or for a limited time, on any terms and subject to any conditions that the court may think just.

(12) Applicants who are resident out of Canada may be ordered to give security for costs to the debtor, and proceedings under the application may be stayed until the security is furnished.

(13) If proceedings on an application have been stayed or have not been prosecuted with due diligence and effect, the court may, if by reason of the delay or for any other cause it is considered just, substitute or add as applicant any other creditor to whom the debtor may be indebted in the amount required by this Act and make a bankruptcy order on the application of the other creditor, and shall, immediately after making the order, dismiss on any terms that it may consider just the application in the stayed or non-prosecuted proceedings.

(14) An application shall not be withdrawn without the leave of the court.

(15) Any creditor whose claim against a partnership is sufficient to entitle the creditor to present a bankruptcy application may present an application against any one or more partners of the firm without including the others.

(16) If a bankruptcy order has been made against one member of a partnership, any other application against a member of the same partnership shall be filed in or transferred to the same court, and the court may give any directions for consolidating the proceedings under the applications that it thinks just.

(17) If a debtor against whom an application has been filed dies, the proceedings shall, unless the court otherwise orders, be continued as if the debtor were alive.

44. (1) Subject to section 43, an application for a bankruptcy order may be filed against the estate or succession of a deceased debtor.

(2) After service of an application for a bankruptcy order on the executor or administrator of the estate of a deceased debtor, or liquidator of the succession of a deceased debtor, the person on whom the order was served shall not make payment of any moneys or transfer any property of the deceased debtor, except as required for payment of the proper funeral and testamentary expenses, until the application is disposed of; otherwise, in addition to any penalties to which the person may be subject, the person is personally liable for the payment or transfer.

(3) Nothing in this section invalidates any payment or transfer of property made or any act or thing done, in good faith, by the executor, administrator of the estate or liquidator of the succession before the service of an application referred to in subsection (2).

45. (1) If a bankruptcy order is made, the costs of the applicant shall be taxed and be payable out of the estate, unless the court otherwise orders.

(2) If the proceeds of the estate are not sufficient for the payment of any costs incurred by the trustee, the court may order the costs to be paid by the applicant.

29. Subsection 46(1) of the Act is replaced by the following:

46. (1) The court may, if it is shown to be necessary for the protection of the estate of a debtor, at any time after the filing of an application for a bankruptcy order and before a bankruptcy order is made, appoint a licensed trustee as interim receiver of the property or any part of the property of the debtor and direct the interim receiver to take immediate possession of the property or any part of it on an undertaking being given by the applicant that the court may impose with respect to interference with the debtor’s legal rights and with respect to damages in the event of the application being dismissed.

30. Subsection 47.2(1) of the Act is replaced by the following:

47.2 (1) If an appointment of an interim receiver is made under section 47 or 47.1, the court may make any order respecting the payment of fees and disbursements of the interim receiver that it considers proper, including an order giving the interim receiver security, ranking ahead of any or all secured creditors, over any or all of the assets of the debtor in respect of the interim receiver’s claim for fees or disbursements, but the court shall not make such an order unless it is satisfied that all secured creditors who would be materially affected by the order were given reasonable advance notification and an opportunity to make representations to the court.

31. Subsection 49(1) of the English version of the Act is replaced by the following:

49. (1) An insolvent person or, if deceased, the executor or administrator of their estate or the liquidator of the succession, with the leave of the court, may make an assignment of all the insolvent person’s property for the general benefit of the insolvent person’s creditors.

32. (1) The portion of subsection 50(1.4) of the Act before paragraph (a) is replaced by the following:

(1.4) Secured claims may be included in the same class if the interests or rights of the creditors holding those claims are sufficiently similar to give them a commonality of interest, taking into account

(2) Paragraph 50(1.4)(b) of the Act is replaced by the following:

(b) the nature and rank of the security in respect of the claims;

(3) Subsection 50(8) of the French version of the Act is replaced by the following:

33. Subsection 50.4(4) of the French version of the Act is replaced by the following:

34. Subsection 63(2) of the French version of the Act is replaced by the following:

35. Section 65 of the French version of the Act is replaced by the following:

36. The portion of subsection 65.1(1) of the English version of the Act before paragraph (a) is replaced by the following:

65.1 (1) If a notice of intention or a proposal has been filed in respect of an insolvent person, no person may terminate or amend any agreement with the insolvent person, or claim an accelerated payment, or a forfeiture of the term, under any agreement with the insolvent person, by reason only that

37. (1) Subsection 65.2(1) of the Act is replaced by the following:

65.2 (1) At any time between the filing of a notice of intention and the filing of a proposal, or on the filing of a proposal, in respect of an insolvent person who is a commercial lessee under a lease of real property or an immovable, the insolvent person may disclaim or resiliate the lease on giving thirty days notice to the lessor in the prescribed manner, subject to subsection (2).

(2) Subsections 65.2(2) to (7) of the En­glish version of the Act are replaced by the following:

(2) Within fifteen days after being given notice of the disclaimer or resiliation of a lease under subsection (1), the lessor may apply to the court for a declaration that subsection (1) does not apply in respect of that lease, and the court, on notice to any parties that it may direct, shall, subject to subsection (3), make that declaration.

(3) No declaration under subsection (2) shall be made if the court is satisfied that the insolvent person would not be able to make a viable proposal without the disclaimer or resiliation of the lease and all other leases that the lessee has disclaimed or resiliated under subsection (1).

(4) If a lease is disclaimed or resiliated under subsection (1),

(a) the lessor has no claim for accelerated rent;

(b) the proposal must indicate whether the lessor may file a proof of claim for the actual losses resulting from the disclaimer or resiliation, or for an amount equal to the lesser of

(i) the aggregate of

(A) the rent provided for in the lease for the first year of the lease following the date on which the disclaimer or resiliation becomes effective, and

(B) fifteen per cent of the rent for the remainder of the term of the lease after that year, and

(ii) three years’ rent; and

(c) the lessor may file a proof of claim as indicated in the proposal.

(5) The lessor’s claim shall be included in either

(a) a separate class of similar claims of lessors; or

(b) a class of unsecured claims that includes claims of creditors who are not lessors.

(6) The lessor is entitled to vote on the proposal in whichever class referred to in subsection (5) the lessor’s claim is included, and for the amount of the claim as proven.

(7) The court may, on application made at any time after the proposal is filed, determine the classes of claims of lessors and the class into which the claim of any of those particular lessors falls.

38. Section 65.21 of the Act is replaced by the following:

65.21 If, in respect of a proposal concerning a bankrupt person who is a commercial lessee under a lease of real property or an immovable, the lessee’s lease has been surrendered, disclaimed or resiliated in the bankruptcy proceedings, subsections 65.2(3) to (7) apply in the same manner and to the same extent as if the person was not a bankrupt but was an insolvent person in respect of which a disclaimer or resiliation referred to in those subsections applies.

39. Section 65.22 of the English version of the Act is replaced by the following:

65.22 If an insolvent person who has disclaimed or resiliated a lease under subsection 65.2(1) becomes bankrupt after the court approval of the proposal and before the proposal is fully performed, any claim of the lessor in respect of losses resulting from the disclaimer or resiliation, including any claim for accelerated rent, shall be reduced by the amount of compensation paid under the proposal for losses resulting from the disclaimer or resiliation.

40. Section 66.29 of the Act is replaced by the following:

66.29 (1) If a consumer proposal is approved or deemed approved by the court, the administrator may, if the administrator believes on reasonable grounds that the debtor owns land or other valuable property, issue a certificate in respect of the proposal, and may cause the certificate to be filed in any place where a certificate of judgment, writ of seizure and sale or other like document may be filed or where a legal hypothec of judgment creditors may be registered.

(2) A certificate filed under subsection (1) operates as a certificate of judgment, writ of execution or legal hypothec of judgment creditors until the proposal is fully performed.

41. Paragraph 66.33(b) of the Act is replaced by the following:

(b) the day on which the first application, if any, for a bankruptcy order in respect of that consumer debtor was filed.

42. The portion of subsection 66.34(1) of the English version of the Act before paragraph (a) is replaced by the following:

66.34 (1) If a consumer proposal has been filed in respect of a consumer debtor, no person may terminate or amend any agreement with the consumer debtor, or claim an accelerated payment, or a forfeiture of the term, under any agreement with the consumer debtor, by reason only that

43. Paragraph 69.2(4)(b) of the English version of the Act is replaced by the following:

(b) in the case of a security for a debt that does not become due until more than six months after the date of the approval or deemed approval of the consumer proposal, that right shall not be postponed for more than six months from that date, unless all instalments of interest that are more than six months in arrears are paid and all other defaults of more than six months standing are cured, and then only so long as no instalment of interest remains in arrears or defaults remain uncured for more than six months, but, in any event, not beyond the date at which the debt secured by the security becomes payable under the instrument or act, or law, creating the security.

44. Sections 70 and 71 of the Act are replaced by the following:

70. (1) Every bankruptcy order and every assignment made under this Act takes precedence over all judicial or other attachments, garnishments, certificates having the effect of judgments, judgments, certificates of judgment, legal hypothecs of judgment creditors, executions or other process against the property of a bankrupt, except those that have been completely executed by payment to the creditor or the creditor’s representative, and except the rights of a secured creditor.

(2) Despite subsection (1), one bill of costs of a barrister or solicitor or, in the Province of Quebec, an advocate, including the executing officer’s fees and land registration fees, shall be payable to the creditor who has first attached by way of garnishment or lodged with the executing officer an attachment, execution or other process against the property of the bankrupt.

71. On a bankruptcy order being made or an assignment being filed with an official receiver, a bankrupt ceases to have any capacity to dispose of or otherwise deal with their property, which shall, subject to this Act and to the rights of secured creditors, immediately pass to and vest in the trustee named in the bankruptcy order or assignment, and in any case of change of trustee the property shall pass from trustee to trustee without any assignment or transfer.

45. Subsection 72(2) of the Act is replaced by the following:

(2) No bankruptcy order, assignment or other document made or executed under the authority of this Act shall, except as otherwise provided in this Act, be within the operation of any legislative enactment in force at any time in any province relating to deeds, mortgages, hypothecs, judgments, bills of sale, chattel mortgages, property or registration of documents affecting title to or liens or charges on real or personal property or immovables or movables.

46. (1) Subsection 73(1) of the English version of the Act is replaced by the following:

73. (1) An execution levied by seizure and sale of the property of a bankrupt is not invalid by reason only of its being an act of bankruptcy, and a person who purchases the property in good faith under a sale by the executing officer acquires a good title to the property against the trustee.

(2) Subsection 73(2) of the Act is replaced by the following:

(2) If an assignment or a bankruptcy order has been made, the executing officer or other officer of any court or any other person having seized property of the bankrupt under execution or attachment or any other process shall, on receiving a copy of the assignment or the bankruptcy order certified by the trustee as a true copy, immediately deliver to the trustee all the property of the bankrupt in their hands.

(3) Subsection 73(3) of the English version of the Act is replaced by the following:

(3) If the executing officer has sold the property or any part of the property of a bankrupt, the executing officer shall deliver to the trustee the money so realized less the executing officer’s fees and the costs referred to in subsection 70(2).

(4) Subsection 73(4) of the Act is replaced by the following:

(4) Any property of a bankrupt under seizure for rent or taxes shall on production of a copy of the bankruptcy order or the assignment certified by the trustee as a true copy be delivered without delay to the trustee, but the costs of distress or, in the Province of Quebec, the costs of seizure are a security on the property ranking ahead of any other security on it, and, if the property or any part of it has been sold, the money realized from the sale less the costs of distress, or seizure, and sale shall be paid to the trustee.

47. Sections 74 to 76 of the Act are replaced by the following:

74. (1) Every bankruptcy order, or a true copy certified by the registrar or other officer of the court that made it, and every assignment, or a true copy certified by the official receiver, may be registered by or on behalf of the trustee in respect of the whole or any part of any real property in which the bankrupt has any interest or estate, or in respect of the whole or any part of any immovable in which the bankrupt has any right, in the registry office in which, according to the law of the province in which the real property or immovable is situated, deeds or transfers of title and other documents relating to real property, an immovable or any interest or estate in real property or any right in an immovable may be registered.

(2) If a bankrupt is the registered owner of any real property or immovable or the registered holder of any charge, the trustee, on registration of the documents referred to in subsection (1), is entitled to be registered as owner of the real property or immovable or holder of the charge free of all encumbrances or charges mentioned in subsection 70(1).

(3) If a bankrupt owns any real property or immovable or holds any charge registered in a land registry office or has or is believed to have any interest, estate or right in any of them, and for any reason a copy of the bankruptcy order or assignment has not been registered as provided in subsection (1), a caveat or caution may be lodged with the official in charge of the land registry by the trustee, and any registration made after the lodging of the caveat or caution in respect of the real property, immovable or charge is subject to the caveat or caution unless it has been removed or cancelled under the provisions of the Act under which the real property, immovable, charge, interest, estate or right is registered.

(4) Every official to whom a trustee tenders or causes to be tendered for registration any bankruptcy order, assignment or other document shall register it according to the ordinary procedure for registering within the official’s office documents relating to real property or immovables.

75. Despite anything in this Act, a deed, transfer, agreement for sale, mortgage, charge or hypothec made to or in favour of a bona fide purchaser, mortgagee or hypothecary creditor for adequate valuable consideration and covering any real property or immovable affected by a bankruptcy order or an assignment under this Act is valid and effectual according to the tenor of the deed, transfer, agreement for sale, mortgage, charge or hypothec and according to the laws of the province in which the property is situated as fully and effectually and to all intents and purposes as if no bankruptcy order or assignment had been made under this Act, unless the bankruptcy order or assignment, or notice of the order or assignment, or caution, has been registered against the property in the proper office prior to the registration of the deed, transfer, agreement for sale, mortgage, charge or hypothec in accordance with the laws of the province in which the property is situated.

76. No property of a bankrupt shall be removed out of the province in which the property was at the date when the bankruptcy order or assignment was made, without the permission of the inspectors or an order of the court in which proceedings under this Act are being carried on or within the jurisdiction in which the property is situated.

48. Section 80 of the Act is replaced by the following:

80. If the trustee has seized or disposed of property in the possession or on the premises of a bankrupt without notice of any claim in respect of the property and after the seizure or disposal it is made to appear that the property, at the date of the bankruptcy, was not the property of the bankrupt or was subject to an unregistered security or charge, the trustee is not personally liable for any loss or damage arising from the seizure or disposal sustained by any person claiming the property, interest in property or, in the Province of Quebec, a right in property, or for the costs of proceedings taken to establish a claim to that property, interest or right, unless the court is of opinion that the trustee has been negligent with respect to the trustee’s duties in relation to the property.

49. (1) The portion of subsection 81.2(1) of the French version of the Act before paragraph (a) is replaced by the following:

(2) The portion of subsection 81.2(1) of the Act after paragraph (d) is replaced by the following:

the claim of the farmer, fisherman or aquaculturist for the unpaid amount in respect of the products is secured by security on all the inventory of or held by the purchaser as of the day referred to in subparagraph (b)(i) or (ii), and the security ranks above every other claim, right, charge or security against that inventory, regardless of when that other claim, right, charge or security arose, except a supplier’s right, under section 81.1, to repossess goods, despite any other federal or provincial Act or law; and if the trustee or receiver, as the case may be, takes possession or in any way disposes of inventory covered by the security, the trustee or receiver is liable for the claim of the farmer, fisherman or aquaculturist to the extent of the net amount realized on the disposition of that inventory, after deducting the cost of realization, and is subrogated in and to all rights of the farmer, fisherman or aquaculturist to the extent of the amounts paid to them by the trustee or receiver.

(3) The definitions “aquaculturist” and “farmer” in subsection 81.2(2) of the English version of the Act are replaced by the following:

“aquaculturist” includes the owner, occupier, lessor and lessee of an aquaculture operation;

“farmer” includes the owner, occupier, lessor and lessee of a farm;

50. (1) Paragraphs 83(1)(a) to (c) of the English version of the Act are replaced by the following:

(a) if the work covered by the copyright has not been published and put on the market at the time of the bankruptcy and no expense has been incurred in connection with that work, revert and be delivered to the author or their heirs, and any contract or agreement between the author or their heirs and the bankrupt shall then terminate and be void or, in the Province of Quebec, null;

(b) if the work covered by the copyright has in whole or in part been put into type and expenses have been incurred by the bankrupt, revert and be delivered to the author on payment of the expenses so incurred and the product of those expenses shall also be delivered to the author or their heirs and any contract or agreement between the author or their heirs and the bankrupt shall then terminate and be void or, in the Province of Quebec, null, but if the author does not exercise their rights under this paragraph within six months after the date of the bankruptcy, the trustee may carry out the original contract; or

(c) if the trustee at the end of the six-month period from the date of the bankruptcy decides not to carry out the contract, revert without expense to the author and any contract or agreement between the author or their heirs and the bankrupt shall then terminate and be void or, in the Province of Quebec, null.

(2) Paragraph 83(2)(b) of the French version of the Act is replaced by the following:

(3) Paragraph 83(2)(c) of the English version of the Act is replaced by the following:

(c) any contract or agreement between the author or their heirs and the bankrupt shall then terminate and be void or, in the Province of Quebec, null, except with respect to the disposal, under this subsection, of copies of the work published and put on the market before the bankruptcy.

51. Section 84 of the French version of the Act is replaced by the following:

52. (1) Subsection 85(1) of the French version of the Act is replaced by the following:

(2) Subsection 85(2) of the English version of the Act is replaced by the following:

(2) If a member of a partnership becomes bankrupt, the court may authorize the trustee to commence and prosecute any action in the names of the trustee and of the bankrupt’s partner, and any release by the partner of the debt or demand to which the action relates is void or, in the Province of Quebec, null.

53. Paragraph 87(1)(a) of the Act is replaced by the following:

(a) the date an application is filed against the debtor,

54. (1) Subsections 91(1) and (2) of the English version of the Act are replaced by the following:

91. (1) Any settlement of property made within the period beginning on the day that is one year before the date of the initial bankruptcy event in respect of the settlor and ending on the date that the settlor became bankrupt, both dates included, is void as against, or in the Province of Quebec, may not be set up against, the trustee.

(2) Any settlement of property made within the period beginning on the day that is five years before the date of the initial bankruptcy event in respect of the settlor and ending on the date that the settlor became bankrupt, both dates included, is void as against, or in the Province of Quebec, may not be set up against, the trustee if the trustee can prove that the settlor was, at the time of making the settlement, unable to pay all the settlor’s debts without the aid of the property that was the subject of the settlement or that the interest of the settlor in the property did not pass on the execution of the settlement.

(2) Subsection 91(3) of the Act is replaced by the following:

(3) This section does not extend to any settlement made in favour of a purchaser, incumbrancer or holder of a charge in good faith and for valuable consideration.

55. (1) Subsection 94(1) of the English version of the Act is replaced by the following:

94. (1) If a person engaged in any trade or business makes an assignment of their existing or future book debts or any class or part of those debts and subsequently becomes bankrupt, the assignment of book debts is void as against, or in the Province of Quebec, may not be set up against, the trustee with respect to any book debts that have not been paid at the date of the bankruptcy.

(2) Subsection 94(3) of the English version of the Act is replaced by the following:

(3) Nothing in this section renders void or, in the Province of Quebec, null any assignment of book debts due at the date of the assignment from specified debtors, or of debts growing due under specified contracts, or any assignment of book debts included in a transfer of a business made in good faith and for adequate valuable consideration.

56. Subsections 95(1) and (2) of the Act are replaced by the following:

95. (1) Every transfer of property, every charge made on property, every payment made, every obligation incurred and every judicial proceeding taken or suffered by any insolvent person in favour of any creditor or of any person in trust for any creditor with a view to giving that creditor a preference over the other creditors is, when it is made, given, incurred, taken or suffered within the period beginning on the day that is three months before the date of the initial bankruptcy event and ending on the date the insolvent person became bankrupt, both dates included, deemed fraudulent and void as against, or in the Province of Quebec, may not be set up against, the trustee in the bankruptcy.

(2) If any transfer, charge, payment, obligation or judicial proceeding mentioned in subsection (1) has the effect of giving any creditor a preference over other creditors, or over any one or more of them, it shall be presumed, in the absence of evidence to the contrary, to have been made, incurred, taken, paid or suffered with a view to giving the creditor a preference over other creditors, whether or not it was made voluntarily or under pressure and evidence of pressure shall not be admissible to support the transaction.

57. Section 96 of the Act is replaced by the following:

96. If the transfer, charge, payment, obligation or judicial proceeding mentioned in section 95 is in favour of a person related to the insolvent person, the period referred to in subsection 95(1) shall be one year instead of three months.

58. (1) The portion of subsection 97(1) of the Act before paragraph (a) is replaced by the following:

97. (1) No payment, contract, dealing or transaction to, by or with a bankrupt made between the date of the initial bankruptcy event and the date of the bankruptcy is valid, except the following, which are valid if made in good faith, subject to the foregoing provisions of this Act with respect to the effect of bankruptcy on an execution, attachment or other process against property, and subject to the provisions of this Act respecting settlements, preferences and reviewable transactions:

(2) Paragraph 97(1)(c) of the Act is replaced by the following:

(c) a transfer by the bankrupt for adequate valuable consideration; and

(3) Subsection 97(2) of the Act is replaced by the following:

(2) The expression “adequate valuable consideration” in paragraph (1)(c) means a consideration of fair and reasonable money value with relation to that of the property assigned or transferred, and in paragraph (1)(d) means a consideration of fair and reasonable money value with relation to the known or reasonably to be anticipated benefits of the contract, dealing or transaction.

(4) Subsection 97(3) of the English version of the Act is replaced by the following:

(3) The law of set-off or compensation applies to all claims made against the estate of the bankrupt and also to all actions instituted by the trustee for the recovery of debts due to the bankrupt in the same manner and to the same extent as if the bankrupt were plaintiff or defendant, as the case may be, except in so far as any claim for set-off or compensation is affected by the provisions of this Act respecting frauds or fraudulent preferences.

59. Subsection 98(1) of the English version of the Act is replaced by the following:

98. (1) If a person has acquired property of a bankrupt under a transaction that is void or voidable and set aside or, in the Province of Quebec, null or annullable and set aside, and has sold, disposed of, realized or collected the property or any part of it, the money or other proceeds, whether further disposed of or not, shall be deemed the property of the trustee.

60. Subsection 99(1) of the Act is replaced by the following:

99. (1) All transactions by a bankrupt with any person dealing with the bankrupt in good faith and for value in respect of property acquired by the bankrupt after the bankruptcy, if completed before any intervention by the trustee, are valid against the trustee, and any estate, or interest or right, in the property that by virtue of this Act is vested in the trustee shall determine and pass in any manner and to any extent that may be required for giving effect to any such transaction.

61. The portion of subsection 101(2) of the English version of the Act before paragraph (a) is replaced by the following:

(2) If a transaction referred to in subsection (1) has occurred, the court may give judgment to the trustee against the directors of the corporation, jointly and severally, or solidarily, in the amount of the dividend or redemption or purchase price, with interest on the amount, that has not been paid to the corporation if the court finds that

62. Section 101.2 of the Act is replaced by the following:

101.2 Sections 91 to 101 apply as though the debtor became bankrupt on the date of the initial bankruptcy event if the proposal is annulled either by the court under subsection 63(1) or as a result of a bankruptcy order or assignment.

63. (1) Subsection 109(4) of the English version of the Act is replaced by the following:

(4) A debtor may not be appointed a proxyholder to vote at any meeting of the debtor’s creditors.

(2) Subsection 109(5) of the Act is replaced by the following:

(5) A corporation may vote by an authorized proxyholder at meetings of creditors.

64. Subsection 113(2) of the Act is replaced by the following:

(2) The vote of the trustee or of their partner, clerk, legal counsel or legal counsel’s clerk, either as creditor or as proxy for a creditor, shall not be reckoned in the majority required for passing any resolution affecting the remuneration or conduct of the trustee.

65. Subsection 120(3) of the French version of the Act is replaced by the following:

66. Subsection 122(2) of the English version of the Act is replaced by the following:

(2) If interest on any debt or sum certain is provable under this Act but the rate of interest has not been agreed on, the creditor may prove interest at a rate not exceeding five per cent per annum to the date of the bankruptcy from the time the debt or sum was payable, if evidenced by a written document, or, if not so evidenced, from the time notice has been given the debtor of the interest claimed.

67. Subsection 127(2) of the French version of the Act is replaced by the following:

68. Subsection 128(1.1) of the French version of the Act is replaced by the following:

69. Subsection 129(4) of the French version of the Act is replaced by the following:

70. (1) Paragraph 136(1)(a) of the Act is replaced by the following:

(a) in the case of a deceased bankrupt, the reasonable funeral and testamentary expenses incurred by the legal representative or, in the Province of Quebec, the successors or heirs of the deceased bankrupt;

(2) Paragraph 136(1)(e) of the Act is replaced by the following:

(e) municipal taxes assessed or levied against the bankrupt, within the two years immediately preceding the bankruptcy, that do not constitute a secured claim against the real property or immovables of the bankrupt, but not exceeding the value of the interest or, in the Province of Quebec, the value of the right of the bankrupt in the property in respect of which the taxes were imposed as declared by the trustee;

(3) Paragraph 136(1)(f) of the English version of the Act is replaced by the following:

(f) the lessor for arrears of rent for a period of three months immediately preceding the bankruptcy and accelerated rent for a period not exceeding three months following the bankruptcy if entitled to accelerated rent under the lease, but the total amount so payable shall not exceed the realization from the property on the premises under lease, and any payment made on account of accelerated rent shall be credited against the amount payable by the trustee for occupation rent;

71. Section 144 of the Act is replaced by the following:

144. The bankrupt, or the legal personal representative or heirs of a deceased bankrupt, is entitled to any surplus remaining after payment in full of the bankrupt’s creditors with interest as provided by this Act and of the costs, charges and expenses of the bankruptcy proceedings.

72. Section 146 of the English version of the Act is replaced by the following:

146. Subject to priority of ranking as provided by section 136 and subject to subsection 73(4), the rights of lessors shall be determined according to the laws of the province in which the leased premises are situated.

73. Paragraph 158(l) of the Act is replaced by the following:

(l) execute any powers of attorney, transfers, deeds and instruments or acts that may be required;

74. Section 160 of the English version of the Act is replaced by the following:

160. If a bankrupt is undergoing imprisonment, the court may, in order to enable the bankrupt to attend in court in bankruptcy proceedings at which the bankrupt’s personal presence is required, to attend the first meeting of creditors or to perform the duties required of the bankrupt under this Act, direct that the bankrupt be produced in the protective custody of an executing officer or other duly authorized officer at any time and place that may be designated, or it may make any other order that it deems proper and requisite in the circumstances.

75. Subsection 161(1) of the French version of the Act is replaced by the following:

76. Subsection 162(1) of the French version of the Act is replaced by the following:

77. Subsection 163(1) of the English version of the Act is replaced by the following:

163. (1) The trustee, on ordinary resolution passed by the creditors or on the written request or resolution of a majority of the inspectors, may, without an order, examine under oath before the registrar of the court or other authorized person, the bankrupt, any person reasonably thought to have knowledge of the affairs of the bankrupt or any person who is or has been an agent or a mandatary, or a clerk, a servant, an officer, a director or an employee of the bankrupt, respecting the bankrupt or the bankrupt’s dealings or property and may order any person liable to be so examined to produce any books, documents, correspondence or papers in that person’s possession or power relating in all or in part to the bankrupt or the bankrupt’s dealings or property.

78. Subsection 164(3) of the French version of the Act is replaced by the following:

79. Section 167 of the French version of the Act is replaced by the following:

80. (1) Paragraph 168(1)(a) of the Act is replaced by the following:

(a) if, after the filing of a bankruptcy application against the bankrupt, it appears to the court that there are grounds for believing that the bankrupt has absconded or is about to abscond from Canada with a view of avoiding payment of the debt in respect of which the bankruptcy application was filed, of avoiding appearance to the application, of avoiding examination in respect of their affairs or of otherwise avoiding, delaying or embarrassing proceedings in bankruptcy against them;

(2) Paragraphs 168(1)(c) and (d) of the Act are replaced by the following:

(c) if, after the filing of a bankruptcy application or an assignment, it appears to the court that there are reasonable grounds for believing that the bankrupt

(i) is about to remove their property with a view to preventing or delaying possession being taken of it by the trustee, or

(ii) has concealed or is about to conceal or destroy any of their property or any books, documents or writings that might be of use to the trustee or to the creditors of the bankrupt in the course of the bankruptcy proceedings;

(d) if the bankrupt removes any property in their possession above the value of twenty-five dollars without leave of the court after service of a bankruptcy application, or without leave of the trustee after an assignment has been made; or

81. Paragraph 168.1(1)(a) of the Act is replaced by the following:

(a) the trustee shall, before the end of the eight-month period immediately following the date on which a bankruptcy order is made against, or an assignment is made by, the individual bankrupt, file a report prepared under subsection 170(1) with the Superintendent and send a copy of the report to the bankrupt and to each creditor who requested a copy;

82. Subsection 169(1) of the Act is replaced by the following:

169. (1) Subject to section 168.1, the making of a bankruptcy order against, or an assignment by, any person except a corporation operates as an application for discharge, unless the bankrupt, by notice in writing, files in the court and serves on the trustee a waiver of application before being served by the trustee with a notice of the trustee’s intention to apply to the court for an appointment for the hearing of the application as provided in this section.

83. (1) Paragraph 178(1)(b) of the English version of the Act is replaced by the following:

(b) any debt or liability for alimony or alimentary pension;

(2) Paragraph 178(1)(c) of the Act is replaced by the following:

(c) any debt or liability arising under a judicial decision establishing affiliation or respecting support or maintenance, or under an agreement for maintenance and support of a spouse, former spouse, former common-law partner or child living apart from the bankrupt;

84. Section 179 of the French version of the Act is replaced by the following:

85. Subsection 180(3) of the French version of the Act is replaced by the following:

86. Section 181 of the Act is replaced by the following:

181. (1) If, in the opinion of the court, a bankruptcy order ought not to have been made or an assignment ought not to have been filed, the court may by order annul the bankruptcy.

(2) If an order is made under subsection (1), all sales, dispositions of property, payments duly made and acts done before the making of the order by the trustee or other person acting under the trustee’s authority, or by the court, are valid, but the property of the bankrupt shall vest in any person that the court may appoint, or, in default of any appointment, revert to the bankrupt for all the estate, or interest or right of the trustee in the estate, on any terms and subject to any conditions, if any, that the court may order.

87. Subsection 187(10) of the Act is replaced by the following:

(10) Nothing in this section invalidates any proceedings by reason of their having been commenced, taken or carried on in the wrong court, but the court may at any time transfer the proceedings to the proper court.

88. (1) Paragraph 192(1)(a) of the Act is replaced by the following:

(a) to hear bankruptcy applications and to make bankruptcy orders if they are not opposed;

(2) Subsection 192(3) of the French version of the Act is replaced by the following:

89. (1) Paragraph 197(6)(a) of the Act is replaced by the following:

(a) commissions on collections, which are a claim ranking above any other claim on any sums collected;

(2) Paragraph 197(6)(c) of the Act is replaced by the following:

(c) the costs on an assignment or costs incurred by an applicant creditor up to the issue of a bankruptcy order;

90. (1) Paragraph 198(1)(d) of the French version of the Act is replaced by the following:

(2) Paragraph 198(1)(g) of the French version of the Act is replaced by the following:

91. Paragraph 200(1)(b) of the French version of the Act is replaced by the following:

92. (1) Paragraph 202(1)(b) of the Act is replaced by the following:

(b) being a trustee, either before providing the security required by subsection 16(1) or after providing it but at any time while the security is not in force, acts as or exercises any of the powers of trustee,

(2) Paragraph 202(1)(f) of the Act is replaced by the following:

(f) directly or indirectly solicits or canvasses any person to make an assignment or a proposal under this Act, or to file an application for a bankruptcy order,

(3) Paragraph 202(1)(h) of the Act is replaced by the following:

(h) being a trustee, makes any arrangement under any circumstances with the bankrupt, or any legal counsel, auctioneer or other person employed in connection with a bankruptcy, for any gift, remuneration or pecuniary or other consideration or benefit whatever beyond the remuneration payable out of the estate, or accepts any such consideration or benefit from any such person, or makes any arrangement for giving up, or gives up, any part of remuneration, either as a receiver or trustee, to the bankrupt or any legal counsel, auctioneer or other person employed in connection with the bankruptcy,

93. Section 204 of the English version of the Act is replaced by the following:

204. If a corporation commits an offence under this Act, any officer or director, or agent or mandatary, of the corporation, or any person who has or has had, directly or indirectly, control in fact of the corporation, who directed, authorized, assented to, acquiesced in or participated in the commission of the offence is a party to and guilty of the offence and is liable on conviction to the punishment provided for the offence, whether or not the corporation has been prosecuted or convicted.

94. Subsection 206(1) of the French version of the Act is replaced by the following:

95. Section 213 of the Act is replaced by the following:

213. If an application for a bankruptcy order or an assignment has been filed under this Act in respect of a corporation, the Winding-up and Restructuring Act does not extend or apply to that corporation, despite anything contained in that Act, and any proceedings that are instituted under the Winding-up and Restructuring Act in respect of that corporation before the application or assignment is filed under this Act shall abate subject to any disposition of the costs of those proceedings to be made in the bankruptcy proceedings that the justice of the case may require.

96. Subsection 237(1) of the Act is replaced by the following:

237. (1) If a debtor in respect of whom a consolidation order has been issued under this Part makes an assignment under section 49, or if a bankruptcy order is made against the debtor under section 43, or if a proposal by the debtor is approved by the court having jurisdiction in bankruptcy under sections 59 to 61, any moneys that have been paid into court as required by the consolidation order and that have not yet been distributed to the registered creditors shall, immediately after the making of the assignment or bankruptcy order or the approval of the proposal, be distributed among those creditors by the clerk in the proportions to which they are entitled under the consolidation order.

97. (1) The portion of the definition “customer” before subparagraph (a)(ii) in section 253 of the English version of the Act is replaced by the following:

“customer” includes

(a) a person with or for whom a securities firm deals as principal, or agent or mandatary, and who has a claim against the securities firm in respect of a security received, acquired or held by the securities firm in the ordinary course of business as a securities firm from or for a securities account of that person

(i) for safekeeping or deposit or in segregation,

(2) The definition “securities firm” in section 253 of the English version of the Act is replaced by the following:

“securities firm” means a person who carries on the business of buying and selling securities from, to or for a customer, whether or not as a member of an exchange, as principal, or agent or mandatary, and includes any person required to be registered to enter into securities transactions with the public, but does not include a corporate entity that is not a corporation within the meaning of section 2;

(3) Paragraph (b) of the definition “security” in section 253 of the English version of the Act is replaced by the following:

(b) a document, instrument or written or electronic record evidencing indebtedness, including a note, bond, debenture, mortgage, hypothec, certificate of deposit, commercial paper or mortgage-backed instrument,

98. Subsection 254(4) of the English version of the Act is replaced by the following:

(4) Nothing in this Part affects the rights of a party to a contract, including an eligible financial contract within the meaning of subsection 65.1(8), with respect to termination, or set-off or compensation.

99. (1) Subsection 256(1) of the Act is replaced by the following:

256. (1) In addition to any creditor who may file an application in accordance with sections 43 to 45, an application for a bankruptcy order against a securities firm may be filed by

(a) a securities commission established under an enactment of a province, if

(i) the securities firm has committed an act of bankruptcy referred to in section 42 or subsection (2) of this section within the six months before the filing of the application and while the securities firm was licensed or registered by the securities commission to carry on business in Canada, and

(ii) in the case in which the act of bankruptcy was that referred to in subsection (2), the suspension referred to in that subsection is in effect when the application is filed;

(b) a securities exchange recognized by a provincial securities commission, if

(i) the securities firm has committed an act of bankruptcy referred to in section 42 or subsection (2) of this section within the six months before the filing of the application and while the securities firm was a member of the securities exchange, and

(ii) in the case in which the act of bankruptcy was that referred to in subsection (2), the suspension referred to in that subsection is in effect when the application is filed;

(c) a customer compensation body, if

(i) the securities firm has committed an act of bankruptcy referred to in section 42 or subsection (2) of this section within the six months before the filing of the application and while the securities firm had customers whose securities accounts were protected, in whole or in part, by the customer compensation body, and

(ii) in the case in which the act of bankruptcy was that referred to in subsection (2), the suspension referred to in that subsection is in effect when the application is filed; and

(d) a person who, in respect of property of a securities firm, is a receiver, receiver-manager, liquidator or other person with similar functions appointed under a federal or provincial enactment relating to securities that provides for the appointment of that other person, if the securities firm has committed an act of bankruptcy referred to in section 42 within the six months before the filing of the application.

(2) Subsection 256(3) of the Act is replaced by the following:

(3) If

(a) a securities exchange files an application under paragraph (1)(b), or

(b) a customer compensation body files an application under paragraph (1)(c),

a copy of the application must be served on the securities commission, if any, having jurisdiction in the locality of the securities firm where the application was filed, before

(c) any prescribed interval preceding the hearing of the application, or

(d) any shorter interval that may be fixed by the court and that precedes the hearing of the application.

100. (1) Paragraph 259(a) of the French version of the Act is replaced by the following:

(2) Paragraph 259(d) of the English version of the Act is replaced by the following:

(d) discharge any security on securities vested in the trustee;

101. Clause 261(2)(a)(ii)(B) of the French version of the Act is replaced by the following:

102. (1) Subsection 268(2) of the Act is replaced by the following:

(2) If a foreign proceeding has been commenced and a bankruptcy order or assignment is made under this Act in respect of a debtor, the court may, on application and on any terms that it considers appropriate, limit the property to which the authority of the trustee extends to the property of the debtor situated in Canada and to any property of the debtor outside Canada that the court considers can be effectively administered by the trustee.

(2) Subsection 268(5) of the French version of the Act is replaced by the following:

103. The portion of section 274 of the Act before paragraph (a) is replaced by the following:

274. If any bankruptcy order, proposal or assignment is made in respect of a debtor under this Act,