COOPERATIVE ASSOCIATION ACT

[SBC 1999] CHAPTER 28

Part 1 — Interpretation and Application

Definitions and interpretation

1 (1) In this Act:

"affiliate" means a corporation that is affiliated with another corporation within the meaning of section 3;

"association" means an association incorporated or continued under this Act or a former Act, and includes a housing cooperative;

"call" includes an installment and any other sum paid or payable or agreed to be paid for a membership share;

"corporate purposes" means, in relation to an association, any effort to

(a) influence the voting of members, investment shareholders or debentureholders of the association at any meeting,

(b) acquire or sell shares or debentures of the association, or

(c) effect an amalgamation involving, or a reorganization of, the association;

"court", except in sections 79, 135, 162 (1) (b) and 202, means the Supreme Court;

"director" means a person who is appointed or elected to the governing body of a corporation and includes every person, by whatever name designated, who performs functions of a director, but does not include a person exempted, conditionally or unconditionally, from this definition by regulation;

"eligible organization" means an organization that under section 32 may be admitted to membership in an association;

"extraprovincial association" means an extraprovincial corporation that is registered under section 181 as an extraprovincial association;

"federation" means an association or extraprovincial association whose membership is comprised substantially of other associations or corporate bodies organized on a cooperative basis;

"first nation" means an aboriginal governing body, however organized and established by aboriginal people within their traditional territory in British Columbia or another province;

"former Act" means the Cooperative Association Act, R.S.B.C. 1996, c. 71, and any predecessor Act, and includes

(a) the Agricultural Act, 1915, S.B.C. 1915, c. 2, in relation to a subsisting association or society having a share capital that was incorporated under or was at any time subject to or governed by that Act, and

(b) the Industrial and Provident Societies Act, R.S.B.C. 1911, c. 105;

"housing cooperative" means an association providing accommodation for persons the majority of whom are members of the association and are ordinarily resident in the accommodation;

"investment share" means a share in an association that is not a membership share;

"investment shareholder" means a person whose name is entered in the register of investment shareholders of an association as an owner of an investment share of the association;

"joint member" means a person who is one of 2 or more persons who jointly hold one membership in an association;

"marketing board" means a marketing board appointed or established under the Natural Products Marketing (BC) Act or under another Act of British Columbia, another province or Canada for the regulation of one or more natural products;

"member" means a member of an association and includes a joint member;

"membership share" means a share, in an association, of the class designated under section 30 as the membership shares and includes the shares that under section 213 or 214 are renamed as the membership shares;

"memorandum" means an association's memorandum of association with all amendments, and includes the application for registration, certificate of incorporation, or a declaration or other equivalent to a memorandum of association, by whatever name called, of an association registered under this Act on its conversion under section 29 of the Farmers and Womens Institutes Act from an institute under that Act to an association under this Act;

"officer", in relation to an association, includes

(a) the chair of the board of directors, every vice chair of the board of directors, the president, every vice president, the secretary, every assistant secretary, the treasurer and every assistant treasurer,

(b) the general manager and every other individual designated, according to function performed for the association, as an officer by the rules or by resolution of the directors, and

(c) every other individual who performs functions for the association similar to those performed by the officers described in paragraphs (a) and (b) of this definition;

"ordinary resolution" means a resolution of the members of an association that is

(a) submitted to all the members who are entitled to vote on the resolution and passed by being consented to in writing by 3/4 of those members, or

(b) passed, after the required notice of meeting under this Act, in a general meeting by a simple majority of the total votes cast by the members who are entitled to vote on the resolution, including votes cast in person and, if permitted by this Act and the association's rules, votes cast by proxy and votes cast by mail ballot;

"patronage return" means an amount that an association allocates among and credits or pays to its members or to its member and non-member patrons based on the business done by them with or through the association;

"registrar" means the Registrar of Companies or an authorized individual performing the registrar's duties;

"reporting association" means an association that was a reporting association under a former Act immediately before the coming into force of this definition and has not ceased under section 2 of this Act to be a reporting association;

"rules" means the rules adopted by an association, as amended from time to time;

"separate resolution" means a resolution of

(a) the investment shareholders if the association has only one class of investment shares, or

(b) the investment shareholders of a particular class of investment shares, if the association has more than one class of investment shares

that is

(c) submitted to all the investment shareholders who are entitled to vote on the resolution and passed by being consented to in writing by all of them, or

(d) passed after the required notice of meeting under this Act, in a meeting of the investment shareholders entitled to vote on the resolution, by a majority that the association's rules specify is required, of the votes cast, in person or by proxy, if that specified majority is at least 2/3 but not more than 3/4 of those votes or, if the association's rules do not specify the required majority, at least 3/4 of those votes;

"special resolution" means a resolution of the members of an association

(a) that is submitted to all the members who are entitled to vote on the resolution and passed by being consented to in writing by all of them, or

(b) that is

(i) passed, after the required notice of meeting under this Act, in a general meeting by a majority that the association's rules specify is required, of the total votes cast by the members who are entitled to vote on the resolution, including votes cast in person and, if permitted by this Act and the association's rules, votes cast by proxy and votes cast by mail ballot, if the specified majority is at least 2/3, but not more than 3/4 of those votes or, if the association's rules do not specify the required majority,

(A) at least 2/3 of those votes, in the case of an association other than a housing cooperative, or

(B) at least 3/4 of those votes, in the case of a housing cooperative, and

(ii) if the association's rules provide as set out in section 41 and the resolution pertains to a matter specified by the association's rules that are authorized under that section, the resolution receives at least the percentage or percentages of favourable votes specified under those rules;

"special rights or restrictions", in relation to investment shares of an association, includes special rights and restrictions, whether preferred, deferred or otherwise, in regard to

(a) redemption or return of capital,

(b) conversion into or exchange for the same or any other number of any other kind, class or series of securities of the association or of any other corporation,

(c) dividends,

(d) voting,

(e) nomination, appointment or election of directors or other control, or

(f) any other matter.

“subscriber” means a person or eligible organization that makes and subscribes the memorandum that is filed with the registrar.

(2) Subject to this section and to any regulations under section 5 (2), and unless the context otherwise requires, words and expressions used in the Company Act, whether or not defined in that Act, have the same meaning for the purposes of this Act as they have in the Company Act.

(3) For the purposes of the definition of "special rights or restrictions", the expressions "special rights" and "restrictions", when used in this Act, or the Company Act as it applies for the purposes of this Act, whether together or separately, have a corresponding meaning.

(4) A reference in an association's memorandum or rules to an extraordinary resolution must be read as a reference to a special resolution.

When status as reporting association ceases

2 (1) An association ceases to be a reporting association, but continues as an association under this Act, if the registrar on application by ordinary resolution of the association orders that it ceases to be a reporting association.

(2) In making an order under subsection (1), the registrar must take into account prescribed criteria.

Corporate relationships

3 (1) For the purposes of this Act, one corporation is affiliated with another corporation if

(a) one of them is the subsidiary of the other,

(b) both of them are subsidiaries of the same corporation, or

(c) each of them is controlled by the same person.

(2) For the purposes of this Act, a corporation is a subsidiary of another corporation if

(a) it is controlled by

(i) that other corporation,

(ii) that other corporation and one or more corporations controlled by that other corporation, or

(iii) 2 or more corporations controlled by that other corporation, or

(b) it is a subsidiary of a subsidiary of that other corporation.

(3) For the purposes of this Act,

(a) a corporation is controlled by a person if

(i) shares of the corporation carrying more than 50% of the votes for the appointment or election of directors are held, other than by way of security only, by or for the benefit of that person, and

(ii) the votes carried by the shares mentioned in paragraph (a) are sufficient, if exercised, to appoint or elect a majority of the directors of the corporation, and

(b) an association is controlled by a person if the person has the right to exercise more than 50% of the voting rights that may be cast at an annual general meeting or to elect or appoint a majority of the directors.

(4) For the purposes of this Act, a corporation is the holding corporation of another corporation that is its subsidiary.

Share ownership

4 (1) For the purposes of this Act, shares are held for the benefit of a person if they are beneficially owned by

(a) the person,

(b) a corporation controlled by the person, or

(c) an affiliate of a corporation controlled by the person.

(2) For the purposes of this Act, a corporation is deemed to beneficially own securities that are beneficially owned by its affiliates.

Application of Company Act to associations

5 (1) For the purposes of this Act, the following provisions of the Company Act apply to and in respect of associations:

(a) sections 75 to 78 and 80 to 85 of Division 2, Borrowings, of Part 3;

(b) sections 181 to 182, 186, 187, 191 and 192 of Part 6, Audits;

(c) in relation to proceedings under section 156 of this Act, section 200 (2) to (6), Complaint by members, section 202, Relief, and section 203, Applications to court;

(d) in relation to proceedings under sections 158 and 159 of this Act, Division 3, Investigations, of Part 7, except sections 209 (1), 210 (1) and 212;

(e) subject to sections 6, 173 and 196 (2) of this Act, Part 9, Dissolution and Restoration, Divisions 1 to 3, except sections 256 and 258;

(f) section 233, Reduction of capital.

(2) The Lieutenant Governor in Council, by regulation, may adopt by reference for the purposes of this Act any provisions of the Company Act then in force, either without variation or with variations that the Lieutenant Governor in Council considers necessary or desirable to give effect to this Act according to its intent.

(3) A regulation under subsection (2) adopting a provision of the Company Act by reference may

(a) limit the application of the provision to or in respect of circumstances specified in the regulation or to or in respect of one or more categories of associations or other persons, and

(b) for the purpose of paragraph (a), define the circumstances and categories on any basis the Lieutenant Governor in Council considers appropriate.

(4) Subsections (2) and (3) and this subsection are repealed on December 31, 2001.

Application of Company Act to extraprovincial associations

6 For the purposes of this Act, the following provisions of the Company Act apply to and in respect of extraprovincial associations:

(a) Division 1, Cancellation, of Part 9, except section 256;

(b) Division 2, Restoration, of Part 9;

(c) Part 10, Extraprovincial Companies, except sections 297, 298, 312 (2) and 313.

Rules for Company Act interpretation

7 (1) In this section, "Company Act" means that Act as it applies for the purposes of this Act.

(2) For the purposes of this Act, a reference in the Company Act

(a) to any of the forms under the Company Act or set out in the schedules to that Act must be read as a reference to the corresponding form prescribed under this Act or, if none, to the form under that Act with the necessary changes to adapt the form for the purposes of this Act,

(b) to "company" must be read as a reference to "association", as the context requires,

(c) to "extraprovincial company" must be read as a reference to "extraprovincial association",

(d) to "reporting company" must be read as a reference to "reporting association",

(e) to "member" or "members" must be read as a reference to "member", "members", "investment shareholder" or "investment shareholders" as necessary to suit the circumstances,

(f) to "memorandum" or "articles" must be read as "memorandum" and "rules", respectively, of an association,

(g) to "minister" must be read as a reference to the minister who is responsible for the administration of this Act, and

(h) to "registered office" or "records office" must be read as a reference to "registered office".

Cooperative basis

8 (1) An association must be organized and operated and must carry on business on a cooperative basis.

(2) An association, other than as described in subsection (3), is organized, operated and administered on a cooperative basis if it is substantially organized, operated and administered on the following principles and methods:

(a) membership in the association is open in a non-discriminatory manner to persons who can use the services of the association and are willing and able to accept the responsibilities of membership;

(b) subject to sections 40 (3) and (4), 42 (1) and 45, each member or delegate has one vote;

(c) members contribute to the capital of the association;

(d) members receive limited or no return on capital subscribed to as a condition of membership;

(e) surplus funds arising from the association's operations are used for any or all of the following purposes:

(i) developing the association;

(ii) providing or improving services to members;

(iii) establishing reserves;

(iv) paying dividends;

(v) community welfare or the propagation of cooperative enterprise;

(vi) distribution among its members as a patronage return;

(f) education is provided on the principles and techniques of cooperative enterprise.

(3) An association having as its business or as one of its businesses the business of acting as a designated agency of one or more marketing boards, despite subsection (2) is organized, operated and administered on a cooperative basis with respect to that business, if it carries on that business on a basis the association's directors consider expedient in order to exercise and carry out the powers, duties, obligations and restrictions vested in and placed on the association by the marketing board or marketing boards, as the case may be.

(4) An association that is substantially organized, operated and administered on the principles and methods set out in subsection (2) but, by its rules restricts the classes of persons to whom membership is available, is organized, operated and administered on a cooperative basis, despite the restrictions, if the restrictions are consistent with applicable laws with respect to human rights and are reasonable in relation to

(a) any business restrictions set out in the memorandum or rules of the association, and

(b) the association's ability to compete commercially in offering services to members and prospective members.

Patronage returns

9 (1) An association may allocate among and credit or pay to the members, as a patronage return, all or a part of the surplus arising from the operations of the association in a financial year in proportion to the business done by the members with or through the association in that financial year, calculated in the manner described in subsection (2) at a rate set by the directors.

(2) For the purpose of subsection (1), the directors of an association may calculate the amount of the business done by each member with or through the association in a financial year by taking into account

(a) the quantity, quality, kind and value of things bought, sold, handled, marketed or dealt in by the association,

(b) the services rendered

(i) by the association on behalf of or to the member, and

(ii) by the member on behalf of or to the association, and

(c) differences that are, in the opinion of the directors, appropriate for different classes, grades or qualities of things and services.

(3) The association's rules may provide that an association may allocate among and credit or pay to persons who use the services of the association but who are not members a share of any surplus at a rate that is equal to or less than the rate at which the surplus is distributed to members.

(4) If an association allocates among and credits or pays to persons referred to in subsection (3) a share of any surplus, the directors must calculate the business done by the non-member patrons in the manner described in subsection (2).

Part 2 — Incorporation

Division 1 — Formation of Associations

Formation of association

10 (1) Any 3 or more persons, eligible organizations or both may be incorporated as an association under this Act to carry on any lawful business or activity on a cooperative basis.

(2) An association must not carry on business without at least 3 members but, if at any time it does so for more than 6 months, every director and officer of the association during the time that it so carries on business is jointly and separately liable for the payment of the whole of the debts of the association contracted during that time.

Filing memorandum and rules

11 The persons, eligible organizations or both wishing to form an association must

(a) make and subscribe, in duplicate, a memorandum according to the prescribed form and the rules adopted by the subscribers,

(b) file the memorandum and rules in the office of the registrar and fulfil the requirements of sections 12 and 13, and

(c) at the time of filing, pay the prescribed fee.

Memorandum requirements

12 The memorandum must

(a) show opposite the name of every subscriber the number of membership shares taken by the subscriber,

(b) show opposite the name of every subscriber the number of each class of investment shares, if any, taken by the subscriber and, for each class taken, whether the shares are without par value or the par value of those shares,

(c) contain every restriction, if any, on the business to be carried on by the association or on the powers of the association,

(d) state the purpose of the association,

(e) if applicable, state that

(i) section 173 of the Cooperative Association Act applies to the association and identify that statement as an unalterable provision, or

(ii) section 196 (1) of the Cooperative Association Act applies to the association and, if applicable, identify that statement as an unalterable provision,

(f) state the par value of its membership shares or that its membership shares are without par value,

(g) state

(i) the maximum number of membership shares that the association is permitted to issue, or

(ii) that the association is permitted to issue an unlimited number of membership shares, and

(h) be consistent with section 49.

Rules

13 (1) Subject to subsection (2), the rules adopted by an association may be in the prescribed form.

(2) The rules adopted by an association must provide for each of the prescribed matters.

(3) The association's rules may allow for joint members and if so

(a) must set out the rights of joint members,

(b) must require the joint members to jointly own the membership shares held by the joint membership,

(c) may set out whether the membership shares held by the members jointly are to be held

(i) in joint tenancy or tenancy in common, or

(ii) in either joint tenancy or tenancy in common, at the option of the members applying for the joint membership shares, and

(d) must be consistent with the requirements of sections 42 and 49.

(4) If the association's rules allow for joint membership, but are silent as to the matters described in subsection (3) (c), the membership shares held by the members jointly are to be held in joint tenancy.

(5) If the association's rules under subsection (3) (c) allow for joint tenancy or tenancy in common at the option of the members applying, but the members do not specify, the membership shares held by the members jointly are to be held in joint tenancy.

List of directors

14 At the time of filing the memorandum and rules of an association under section 11, the persons wishing to form an association must also file with the registrar each of the following:

(a) a list of the persons named as the first directors of the association under section 73, stating their full names and addresses;

(b) a notice setting out the address of the registered office of the association as required by section 27.

Registration documents

15 (1) After receiving the material required to be filed with the registrar under sections 11 and 14, the registrar, if satisfied that the material filed meets the requirements of this Part, must

(a) register the memorandum and rules and enter the name of the association in the registrar's records,

(b) issue a certificate of incorporation showing that the association is incorporated under this Act, and

(c) publish in the Gazette notice of the incorporation of the association together with a statement of the purpose of the association.

(2) The registrar must retain and register one copy of the memorandum and rules and return the other copy to the applicants, certified as having been filed with the registrar.

Conclusiveness of certificate

16 A certificate of incorporation given by the registrar for an association is conclusive evidence

(a) of compliance with the requirements of this Act for incorporation, and

(b) that the association has been incorporated in accordance with this Act.

Incorporation from date of certificate

17 On and after the date of the certificate of incorporation, the subscribers and other persons who may become members of the association, are a corporation by the name described, subject to this Act.

Effect of memorandum and rules

18 The memorandum and rules, when registered, bind the association, its members and its investment shareholders to the same extent as if the memorandum and rules

(a) had each been signed and sealed by the association, each member and each investment shareholder, and

(b) each contained covenants on the part of each member and investment shareholder to observe the memorandum and rules.

Power and capacity

19 An association has the capacity and the rights, powers and privileges of an individual of full capacity.

Restricted business and powers

20 (1) An association must not carry on a business that it is restricted from carrying on by its memorandum.

(2) An association must not exercise

(a) a power that it is restricted from exercising by its memorandum, or

(b) any of its powers in a manner inconsistent with the restrictions in its memorandum.

(3) An act of an association, including any transfer of property to or by an association, is not invalid merely because the act or transfer is contrary to the association's memorandum or rules or to this Act.

No constructive notice

21 In proceedings by or against an association, a person is not affected by or deemed to have notice or knowledge of the contents of a document or other record concerning the association merely because the document or other record has been filed with the registrar or is available for inspection at an office of the association.

Division 2 — Name

Name reservation

22 On request, the registrar may reserve a name

(a) for a period of 2 months from the date of reservation,

(i) for an intended association,

(ii) for an association about to change its name, and

(iii) for an extraprovincial corporation intending to

(A) apply for registration as an extraprovincial association, or

(B) change its name, and

(b) for the period the registrar allows, for an association or extraprovincial association intending to amalgamate with another.

Form of name

23 (1) An association must include the word "cooperative", "co-operative", "coop", "co-op" or "coopérative", or another grammatical form of any of those words, as part of its name.

(2) An association may include only one of the following words in its name:

(a) "association";

(b) "society";

(c) "union";

(d) "exchange";

(e) a similar word approved by the registrar.

(3) An association must not include in its name the words "not for profit" or "non profit" or any words of similar import unless section 173 applies to the association.

(4) An association must not include in its name either the word "company" or the word "limited".

Registrar's discretion as to name

24 An association must not be incorporated under section 10, a corporation must not be continued under section 185 and an extraprovincial corporation must not be registered as an extraprovincial association under section 181 under a name that

(a) the registrar for a good and valid reason disapproves, or

(b) does not comply with the applicable requirements of this Division.

Use of "cooperative" and its derivatives in business name restricted

25 A person must not carry on any business or activity under any name that includes the word "cooperative", "co-operative", "coop", "co-op" or "coopérative", or another grammatical form of any of those words, or adopt any new name including that word, or grammatical form, unless the person is

(a) an association,

(b) incorporated under an Act of Canada as a cooperative association, insurance company or credit society,

(c) a corporation incorporated under another Act that at the time this section comes into force is the subject of a subsisting approval of the superintendent under a former Act, or

(d) an extraprovincial association.

Publication of name

26 An association must do the following:

(a) display its name, and keep its name displayed, in legible letters in a conspicuous position at each place in which its business is carried on;

(b) have its name engraved in legible characters on its seal, if any;

(c) have its name mentioned in legible characters

(i) on all notices, advertisements and other official publications of the association,

(ii) on all commercial paper or goods purporting to be signed by or on behalf of the association, and

(iii) on all bills or parcels, invoices, receipts and letters of credit of the association.

Division 3 — Registered Office

Registered office

27 An association must

(a) have a registered office in British Columbia to which all communications and notices may be delivered, and

(b) file with the registrar notice of every change in its address.

Service of documents

28 A document or other record may be served on an association by

(a) leaving it at, or mailing it by registered mail to, the registered office of the association as recorded under this Act, or

(b) personally serving a director or officer of the association.

Part 3 — Membership and Voting

Division 1 — Membership

Membership

29 The members of an association are the subscribers and the persons and eligible organizations admitted to membership in the association according to its rules.

Membership share requirement

30 An association, in its rules, must designate a class of shares as the membership shares and provide, as a condition of the admission of a person or eligible organization as a member of the association, that the person or eligible organization subscribe for a minimum number of membership shares.

Members under 19 years of age

31 (1) An association may provide in its rules for the admission to membership in the association of persons under 19 years of age who are at least 16 years of age.

(2) Rules referred to in subsection (1) are subject to subsection (3).

(3) Despite the Infants Act, the Age of Majority Act or the common law and subject to subsection (4) of this section, an individual admitted to membership in an association who is under 19 years of age and who is at least 16 years of age

(a) has the same obligations, rights and legal capacity as a member of the association who has reached 19 years of age, and

(b) may be sued,

but only in respect of membership in an association and of any indebtedness or obligation to the association.

(4) An individual under 18 years of age is not eligible to be a director or officer of an association.

Government, first nations and corporations as members

32 Each of the following may be admitted to membership in an association and represented by an individual authorized on its behalf:

(a) the government;

(b) a first nation;

(c) a corporation.

Withdrawal from membership

33 (1) An association

(a) must permit the withdrawal of members from the association, and

(b) subject to section 38 (1) and paragraph (a) of this subsection, may provide in the association's rules for the withdrawal of members from the association and the transfer of their membership shares.

(2) Withdrawal from membership in an association is subject to any rules of the association that are made in accordance with subsection (1) (b).

Termination of membership in an association
other than a housing cooperative

34 (1) This section applies only to an association other than a housing cooperative.

(2) An association may provide in its rules for the termination of the membership of a member.

(3) Rules referred to in subsection (2) are subject to this section and sections 36 to 39.

(4) Subject to any rules of an association for termination of membership, and to subsections (5) and (6) of this section and sections 36 to 39, an association may terminate the membership of a member if

(a) the member has engaged in conduct detrimental to the association,

(b) the member has not paid money due by the member to the association within a reasonable time after receiving written notice to do so from the association, or

(c) in the opinion of the directors, based on reasonable grounds, the member

(i) has breached a material condition of an agreement with the association, and

(ii) has not rectified the breach within a reasonable time after receiving written notice to do so from the association.

(5) An association may exercise the powers under this section to terminate the membership of a member only by a resolution of the directors requiring a majority of at least 3/4 of all the directors and passed at a meeting of the directors called to consider the resolution.

(6) Sections 156 and 208 do not apply to termination of a membership in an association on the grounds described in subsection (4) (b) or (c).

Termination of membership in a housing cooperative

35 (1) A housing cooperative may provide in its rules for the termination of the membership of a member.

(2) Rules referred to in subsection (1) and the rules that a housing cooperative may adopt under subsection (3) of this section are subject to this section and sections 36 to 39.

(3) A housing cooperative by its rules may adopt either of the following grounds as constituting grounds for termination of the membership of a member who has a right to possession or occupancy of residential premises that is dependent on the member's membership:

(a) the member has not paid rent, occupancy charges or other money due by the member to the housing cooperative in respect of the residential premises and has not rectified the nonpayment within a reasonable time after receiving written notice to do so from the housing cooperative;

(b) the member

(i) has not paid rent, occupancy charges or other money due by the member to the housing cooperative in respect of the residential premises, or

(ii) in the opinion of the directors, based on reasonable grounds, has breached a material condition of an agreement between the member and the housing cooperative relating to the member's

(A) possession or occupancy of the residential premises, or

(B) use of the property of which those premises form part,

and has not rectified the nonpayment or breach within a reasonable time after receiving written notice to do so from the housing cooperative.

(4) Subject to any rules of a housing cooperative for termination of membership, and to subsections (5) and (6), a housing cooperative may terminate the membership of a member if the member has engaged in conduct detrimental to the housing cooperative.

(5) A housing cooperative may exercise the powers under this section to terminate the membership of a member only by a resolution of the directors requiring a majority of at least 3/4 of all the directors and passed at a meeting of the directors called to consider the resolution.

(6) Sections 156 and 208 do not apply to termination under this section of a membership in a housing cooperative.

Notices respecting the termination of members

36 (1) A member of an association whose membership is proposed to be terminated by a resolution of the directors

(a) is entitled to at least 7 days' notice of the meeting at which the resolution is to be considered, together with a statement of the grounds on which the member's membership is proposed to be terminated, and

(b) may appear, either personally or by or with an agent or counsel, to make submissions at the meeting.

(2) Within 7 days after the date on which a proposed resolution to terminate a membership referred to in subsection (1)

(a) is withdrawn,

(b) is defeated because it does not receive the required majority, or

(c) is passed by the required majority,

the directors must deliver written notice of the outcome to the member.

Appeal from termination of membership

37 (1) A person whose membership in an association is terminated under section 34 or 35 may appeal the decision of the directors at the next meeting of the association, by delivering a notice of appeal to the association within 7 days after delivery of written notice under section 36 (2).

(2) A person whose membership in an association is terminated and who, under and within the time limited by subsection (1), appeals the termination of the membership, continues, despite the resolution of the directors terminating the membership, to be a member of the association unless the members at the general meeting to which the appeal is brought confirm the termination of the membership

(a) in the case of a membership in an association other than a housing cooperative,

(i) if the membership is terminated for any of the reasons referred to in section 34 (4) (b) or (c), by a resolution requiring a simple majority or, if provided by the association's rules, a greater majority, or

(ii) if the membership is terminated for the reason referred to in section 34 (4) (a), by a special resolution, or

(b) in the case of a membership in a housing cooperative,

(i) if the membership is terminated for any of the reasons referred to in section 35 (3), by a resolution requiring a simple majority or, if provided by the housing cooperative's rules, a greater majority, or

(ii) if the membership is terminated for the reason referred to in section 35 (4), by a special resolution.

(2.1) If the members of a housing cooperative confirm the termination of a person’s membership under subsection (2) (b), the housing cooperative must

(a) promptly serve the person with 

(i) a notice that the resolution or special resolution confirming the termination was passed by the members, and 

(ii) a notice in the prescribed form of the person’s right to appeal the termination under subsection (3), and 

(b) comply with other prescribed conditions.

(3) A person who has been served with a notice under subsection (2.1) (a) (i) may appeal the termination to the court before the expiry of the 30 day period beginning on the day after the person is served with the notice on any of the following grounds: 

(a) the housing cooperative failed to observe the principles of natural justice in terminating the membership; 

(b) the decision of the housing cooperative is not reasonably supported by the facts; 

(c) the decision of the housing cooperative is not authorized by section 35. 

(3.1) Despite section 171, a person who has commenced an appeal in accordance with subsection (4) of this section continues to be a member of the association for the purposes of an application under section 172.1, and may include with the appeal an application under section 172.1 for an order of possession.

(4) An appeal to the court under subsection (3) must be commenced in accordance with Rule 49 of the Rules of Court by notice of appeal in Form 59

(a) filed in a registry of the court before expiry of the 30 day period referred to in subsection (3), and

(b) served on the housing cooperative before expiry of the 14 day period beginning on the day after the notice of appeal is filed in the registry of the court.

(4.1) If a person commences an appeal under subsection (3) from a decision of a housing cooperative to terminate that person’s membership, the housing cooperative may file an application under section 172 (1) with its appearance under Rule 49 (6) of the Rules of Court. 

(4.2) If an appeal is commenced under this section, 

(a) any application by the housing cooperative for an order under section 172 (1) must be filed with the appearance, and 

(b) any application by the member under section 172.1 must be filed with the notice of appeal 

so that the court may determine at the same time all the issues between the parties relating to the termination.

(5) An appeal to the court under subsection (3) may be a new hearing and the court may hear all the evidence the court considers relevant including, but not limited to, the evidence of the housing cooperative and the person, and the court 

(a) must either 

(i) despite section 39, restore the membership in the housing cooperative of the person whose membership was terminated by the resolution or special resolution, with the restoration to be effective on and after a date specified by the court, and if an application has been made under section 172.1, the court must make an order of possession in favour of the member, or

(ii) confirm the resolution or special resolution by which the members of the housing cooperative confirmed the termination of the person’s membership, and if an application has been made under section 172, the court must make an order of possession in favour of the housing cooperative, and 

(b) may make any other order that the court considers appropriate.

(6) An appeal from a decision of the court under subsection (5) lies to the Court of Appeal with leave of a justice of the Court of Appeal.

Requirement to redeem shares on membership withdrawal or termination

38 (1) A person who withdraws from membership in an association is entitled, subject to section 66 (2), to require the association to redeem

(a) the person's membership shares, and

(b) any of the person's investment shares in classes restricted for distribution to members only

within a period and on conditions the association may establish under its rules, or immediately and unconditionally, if the association's rules do not establish any period or conditions.

(2) A person whose membership in an association is terminated under this Division is entitled, subject to section 66 (2), to require the association to redeem

(a) the person's membership shares, and

(b) any of the person's investment shares in classes restricted for distribution to members only.

(3) The entitlement, described in subsections (1) and (2), of a person who withdraws from membership in a housing cooperative or whose membership in a housing cooperative is terminated, is postponed until the person has given up the actual possession and occupancy of any residential premises in which the person had a right to possession or occupancy dependent on the person's membership.

(4) In the case of an association to which section 173 or 196 (2) applies, the refund on account of membership shares must not exceed the amount paid up on the member's membership shares.

Special resolution for readmission

39 A member whose membership is terminated under this Division must not be again admitted to membership except by special resolution of the association.

Division 2 — Voting by Members

Right to vote

40 (1) Subject to this Division and to Division 3 of this Part, a member has one vote on all matters to be decided by the members.

(2) A member's right to vote derives from membership and not membership shares.

(3) An association may provide in its rules that on an equality of votes, the chair at any meeting of members has a casting or second vote.

(4) A member in arrears with a call on the member's membership shares may not exercise any right to vote on the member's own behalf or on behalf of any other person.

Special voting rights for classes of membership

41 An association with more than one class of membership may provide in its rules that a special resolution that pertains to a matter specified by the association's rules does not pass unless in addition to receiving the majority for passage required under paragraph (b) (i) of the definition of "special resolution", the percentage of votes cast in favour of the resolution by the members of each class is at least the percentage, if any, specified in the association's rules for that class on that matter.

Joint members

42 (1) Joint members of an association are together entitled to only one vote unless the association's rules provide for each of the joint members to have one vote.

(2) An association may provide in its rules for the exercise by joint members of their voting right under subsection (1).

(3) Subject to any rules of an association under subsection (2), if 2 or more persons are joint members of an association who are entitled to one vote between or among them, the joint member whose name appears as the first of 2 or more joint members on the association's register of members is entitled to cast the vote, but if that joint member does not do so, the joint member whose name next appears on the register is entitled to cast the vote, and so on if there are more than 2 joint members.

(4) Joint members of an association are jointly and separately liable for all assessments, levies, dues, fees, payments and other charges imposed or payable in respect of the membership.

(5) If membership shares are held jointly by more than one person,

(a) an association is not required to issue more than one share certificate in respect of those membership shares, and

(b) delivery of a share certificate to one of the joint owners is sufficient delivery to them all.

Proxy voting

43 (1) Except as permitted under this section,

(a) an association may not permit its members to vote by proxy at meetings of the members, and

(b) the members may not vote by proxy at meetings of the members.

(2) Subject to subsection (3), a member of an association may vote by proxy at a meeting of the association or any adjournment of that meeting if the member's residence, as determined from the register of members of the association, is more than 80 km, or more than a distance specified in the association's rules,

(a) from the place of the meeting, if there is only one meeting place, or

(b) from the place of the meeting closest to the member's residence, if there are 2 or more meeting places.

(3) An association in its rules may

(a) specify the distance for the purpose of subsection (2),

(b) further restrict proxy voting permitted under this section,

(c) provide for the form and manner of proxy voting permitted under subsection (2), or

(d) entirely prohibit membership proxy voting.

(4) A proxy is invalid if

(a) it does not specify a particular meeting at which the proxy may be exercised, or

(b) it is given for more than one meeting and any adjournment of that meeting.

(5) A proxy is valid only at the meeting specified in the proxy or any adjournment of that meeting.

(6) Proxies under this section may be given only to a member of the association and the member to whom the proxy is given may not vote the proxy except in person at the meeting specified in the proxy or any adjournment of that meeting.

(7) A member may not vote more than 3 membership proxies.

Voting choices for a member

44 An association may provide in its rules to allow its members to vote in an election of directors and on special resolutions and ordinary resolutions by voting in person at a general meeting or voting by mail ballot, whichever method the member chooses.

Corporate membership — equitable voting

45 If the members of an association are corporate bodies organized on a cooperative basis, the association may provide in its rules for an equitable system of voting that will give representation in relation to the number of persons who are members of each member body and to the patronage of the association by its members.

Division 3 — Delegate System of Voting

Rules may provide for a delegate system

46 (1) Despite any other provision of this Act, an association may provide in its rules for a system of delegate voting by members including the following or similar provisions:

(a) division of the territory in which the association has members into districts, and the formation in each district of

(i) a local organization comprising all members of the association resident within the district, or

(ii) 2 or more local organizations comprising the members of the association resident within the area of each of the local organizations;

(b) number of directors to be elected from each district, and the election of those directors either directly by the members of the local organizations or by district delegates;

(c) election of district delegates by each local organization to attend general meetings of the association as delegates from the district, and the number to be so elected by each local organization;

(d) delegation to the district delegates of all or any of the powers that may be exercised by the members of the association at a general meeting;

(e) method of forming new districts, either as additions to or substitutions for the existing districts, and redetermining the number of directors and local organizations;

(f) method of summoning district delegates to attend general meetings of the association, the number of delegates to constitute a quorum and the persons who may call meetings, including a provision for the calling of special general meetings at any time at the request of at least 25% of the district delegates;

(g) obtaining the opinion of the members of the association on any question of general concern to the members, and the mode of obtaining that opinion by a vote of the members.

(2) Each member of an association that has a delegate system of voting may vote

(a) only at the meetings of the local organization of which he or she is a member, and

(b) only on questions submitted to the vote of the members under the provisions of rules made under subsection (1) (g).

(3) Only the district delegates are entitled to attend and vote at general meetings of the association, each delegate having one vote.

Executive committee

47 An association that has a delegate system of voting may provide in its rules for

(a) the formation of an executive committee and the exercise by that committee of all or any of the functions and powers of the directors, and

(b) the remuneration of district delegates and of members of the executive committee.

Part 4 — Finance

Division 1 — Share Capital Structure

Capital — membership and investment shares

48 (1) The authorized share capital of an association consists of

(a) a single class of membership shares, with or without par value, regardless of whether or not the association has more than one class of membership, and

(b) if authorized by the association's memorandum, one or more classes of investment shares, with or without par value.

(2) If the authorized investment share capital of an association consists of investment shares both with and without par value, the investment shares with par value must be a class or classes of shares distinct from the shares without par value.

(3) Every investment share of a class of investment shares without par value must be equal to every other investment share of that class, and are subject to special rights or restrictions attached to the investment shares of that class.

(4) A share in an association is personal estate.

Investment shares — provisions in memorandum and rules

49 An association may provide in its memorandum for the association to issue investment shares, and if the memorandum so provides, the memorandum of the association must be consistent with the requirements for investment shares in section 48, and 

(a) the memorandum must set out for every class of investment shares 

(i) whether the number of investment shares that may be issued is unlimited and, if not, the maximum number of investment shares that may be issued, and 

(ii) the par value of the shares or a statement that the shares are without par value, and 

(b) the rules must set out 

(i) the designation of each class of investment shares and the special rights and restrictions attached to each class, and 

(ii) if applicable, that investment shares may be issued to non-members.

Section Repealed

50 [Repealed 2000-5-14.]

Consideration for membership and investment shares

51 (1) The consideration for a share with par value issued or allotted by an association, whether it is a membership share or investment share, must be equal to or greater than the par value of the share.

(2) The consideration for a share without par value issued or allotted by an association, whether it is a membership share or investment share, must be set

(a) in the manner required by the association's rules, or

(b) by special resolution of the association if its rules do not set out the manner in which the consideration is to be set.

(3) All membership shares and investment shares in an association must be paid for in money, except as permitted by subsection (4), and must not be issued at a discount.

(4) An association may issue membership shares or investment shares in consideration or partial consideration for the acquisition of

(a) shares or other securities of an association having a purpose similar to its own,

(b) assets to be used in its business, or

(c) all or part of the business of another person if the business is consistent with the association's own purpose.

Issue of membership and investment shares

52 (1) An association must not issue or allot membership shares or investment shares until the shares are fully paid, except, in the case of membership shares with par value, as permitted by the association's rules under subsection (2).

(2) An association whose membership shares are shares with par value may provide in its rules for either or both of the following:

(a) that the membership shares in the association may be payable on call;

(b) that the membership shares may be forfeited for default in payment.

Payments to joint shareholders

53 Unless otherwise agreed between an association and its joint membership shareholders or joint investment shareholders, as the case may be,

(a) payments, including redemption amounts and interest and dividends, must be made to the shareholders jointly, and

(b) payment by an association in accordance with this section is an effective discharge of the association, with respect to a demand by a person against it, up to the amount so paid.

Member share dividends or interest

54 A member must not receive any dividend or interest on membership shares, except in proportion to the amount paid up on them, if they are membership shares with par value.

Liability of members and investment shareholders

55 (1) The liability of a member or investment shareholder of an association for the debts, obligations and acts of the association is limited to the amount, if any, unpaid on the shares held by the member or investment shareholder.

(2) Money payable by a member or investment shareholder to an association under its memorandum or rules is a debt due from the member or investment shareholder to the association of the nature of a debt due by instrument under seal.

Association's lien on membership or investment shares

56 An association has a lien on the membership shares or investment shares of the person who holds the shares for a debt due to the association by that person, and the lien extends to any dividend or interest credited to that person for the membership shares or investment shares, as the case may be.

Membership or investment share certificates

57 (1) A person whose name is entered in an association's register of investment shareholders or in the association's register of members is entitled, without payment, to a certificate of the association, specifying the investment shares of each class or the membership shares that are held by the person and the amount paid up on them.

(2) A certificate referred to in subsection (1) is evidence of the person's title to the membership shares or investment shares described in the certificate.

(3) Despite subsection (1), an association's rules may require that the association not issue membership share certificates.

Particulars of issue on investment share certificates

58 (1) If an association has more than one class of investment shares, the association must ensure that

(a) a full text of the special rights or restrictions attached to any class of investment shares is contained in or permanently attached to every share certificate representing that class of investment shares, or

(b) every share certificate representing investment shares of a particular class of investment shares includes a statement on it that

(i) there are special rights or restrictions attached to that class of investment shares, and

(ii) a free copy of the full text of the special rights or restrictions may be obtained at the registered office of the association.

(2) An association must

(a) keep at its registered office a copy of the full text of the special rights or restrictions attached to any class of investment shares, and

(b) provide a free copy of that text to any person who requests one.

Division 2 — Voting by Investment Shareholders

Investment shareholder voting rights and restrictions

59 (1) Subject to this section, no right to vote on a matter that is the subject of a special or ordinary resolution of the members of an association attaches to an investment share in the association.

(2) The rules of an association may provide that investment shares, or if there are classes of investment shares, investment shares of a specified class, confer on their holders the right

(a) to vote on an election of directors because of the occurrence of a contingency that has occurred and is continuing, or

(b) to elect a set number or a percentage of the directors.

(3) A right referred to in subsection (2) is exercisable at a separate meeting of the investment shareholders or of the holders of the investment shares of the specified class, as the case may be.

(4) Despite subsection (2) of this section, the rules must not provide

(a) contrary to section 72, or

(b) that the investment shareholders have the right to elect more than 20% of the directors.

Separate resolution rights not affected

60 Section 59 does not affect the right of investment shareholders of an association to vote on any separate resolution under this Act.

One investment share, one vote