1998/99 Legislative Session: 3rd Session, 36th Parliament
FIRST READING
The following electronic version is for informational purposes only.
The printed version remains the official version.
Part 10 -- Dissent
160 In this Part:
"dissenter" means a person who, being entitled to do so, gives written notice of dissent when and as required by section 164;
"dissenter's shares" means all of the shares in respect of which a dissenter must dissent under section 161 (3) or (4) and "dissenters' shares" has a corresponding meaning in relation to the dissenters to whom it refers;
"reasonable value" means the value of a dissenter's shares immediately before the date of the resolution authorizing or effecting the corporate action in respect of which the dissenter dissented, excluding any appreciation or depreciation in anticipation of the corporate action unless exclusion would be inequitable, but in respect of membership shares of an association to which section 173 or 196 (2) applies, must not exceed the amount paid up on those member's membership shares.
161 (1) A member of an association is entitled to dissent in respect of the following:
(a) a resolution to amend the association's memorandum or rules, as the case may be, to create a class or classes of investment shares that are not restricted to members only;
(b) a resolution to amend the association's rules to divide the membership into classes;
(c) a resolution to approve the association continuing into a jurisdiction other than British Columbia;
(d) a resolution to dispose of the whole or substantially the whole of the undertaking;
(e) a resolution passed under section 70 (2).
(2) An investment shareholder of an association is entitled to dissent in respect of the following:
(a) a resolution approving an amalgamation of the association with another or other associations;
(b) a resolution to approve the association continuing into a jurisdiction other than British Columbia;
(c) a resolution to dispose of the whole or substantially the whole of the undertaking;
(d) a resolution passed under section 70 (1).
(3) A member who wishes to exercise a right of dissent must dissent in respect of all of the membership shares and investment shares that are limited to ownership only by members of the association and that are owned by the member.
(4) An investment shareholder who wishes to exercise a right of dissent must dissent in respect of all of the investment shares in the association that are owned by the investment shareholder.
162 (1) The right of a dissenter to obtain payment of the reasonable value of the dissenter's shares terminates on the occurrence of any one of the following events:
(a) the corporate action in respect of which the dissenter dissented is abandoned or the resolution authorizing the corporate action is revoked;
(b) a court of competent jurisdiction permanently enjoins or sets aside the corporate action in respect of which the dissenter dissented;
(c) the notice of dissent given to the association under section 164 is withdrawn with the written consent of the association;
(d) the amalgamation in respect of which a notice of dissent was given is not adopted by one or more of the amalgamating associations with the result that the amalgamation is not effected;
(e) the dissenter, after giving notice of dissent, acts inconsistently with that dissent;
(f) the dissenter consents to, or votes in favour of, the resolution to which he or she is dissenting, unless the vote is given solely as a proxy holder for a person whose proxy required an affirmative vote.
(2) Despite subsection (1) (e), a dissenter who makes a request to withdraw a notice of dissent, or a response to an offer made under section 165 (a), retains the right to obtain payment of the reasonable value of the dissenter's shares unless that request is accepted by the association.
163 (1) If a resolution that might give rise to a notice of dissent is to be considered at a general meeting or a class meeting, the association must give notice to each of its members or investment shareholders, as the case may be, in the same manner as set out in sections 147, accompanied by
(a) a copy of the proposed resolution, and
(b) a statement, in the prescribed form, advising members or investment shareholders, as the case may be, of their right to give and the consequences of giving a notice of dissent.
(2) Notice under subsection (1) must be given at least 14 days before the date of the proposed meeting.
(3) Any member or investment shareholder who receives a notice under subsection (1) (b) may give a notice of dissent to the association in respect of the resolution referred to in subsection (1).
164 (1) A member or investment shareholder who is entitled to exercise dissent rights in respect of a resolution may do so by giving to the association written notice of dissent in respect of the resolution,
(a) at or by or by the time specified by the resolution,
(b) if the resolution that gives rise to the right of dissent does not specify a time for the giving of notice of dissent, at least 2 days before the date of the meeting at which the resolution in respect of which dissent may be exercised is to be passed, or
(c) if the member or investment shareholder does not receive the notice required under section 163, within 21 days after learning that the resolution has been passed.
(2) Within 30 days after giving a notice of dissent, the dissenter must deliver to the association the dissenter's share certificates, unless the dissenter is a member of an association whose rules require in accordance with section 57 that it not issue membership share certificates.
(3) Unless the court otherwise orders, the right of a dissenter to obtain payment of the reasonable value of the dissenter's shares terminates if the dissenter fails to comply with subsection (2).
(4) A dissenter who has complied with subsections (1) and (2)
(a) may not vote, or exercise or assert any rights of a member or investment shareholder, as the case may be, in respect of the dissenter's shares, other than under this Part, and
(b) until the dissenter is paid in full for the dissenter's shares, may exercise and assert all the rights of a creditor of the association.
165 An association that has authorized or effected a corporate action by a resolution in respect of which dissent was made must send to each member or investment shareholder who gave a notice of dissent in respect of the resolution,
(a) a written offer by which the association offers to pay to the dissenter the amount estimated by the association to be the reasonable value of the dissenter's shares, and
(b) an explanation, in sufficient detail to permit the dissenter to form a reasoned judgment concerning the matter, as to how the association estimated the reasonable value of the dissenter's shares.
166 (1) Subject to section 167, if the dissenter accepts the offer made under section 165, the association must pay the offered amount to the dissenter promptly after its receipt of the dissenter's acceptance of the offer.
(2) Within 50 days after the action approved by the resolution is effective or within such further period as the court may allow, an association may apply to the court to fix the reasonable value for the shares of the dissenters if
(a) the association fails to make an offer under section 165, or
(b) a dissenter fails to accept an offer made under that section.
(3) If an association fails to apply to the court under subsection (2), a dissenter may apply to the court for the same purposes within a further period of 20 days or within the further period that the court may allow.
(4) On an application under this section, the court may make any order it considers appropriate and, without limitation, may
(a) grant judgment to a dissenter for the reasonable value of the dissenter's shares, as determined by the court, plus any interest the court considers appropriate,
(b) fix the price and terms of the purchase and sale of the dissenter's shares, or order that the price and terms be established by arbitration, in either case having due regard for the rights of creditors,
(c) join in the application any dissenter who has not accepted an offer under section 165 and any other person the court considers appropriate, and
(d) make consequential orders and give directions it considers appropriate.
(5) Subject to section 167, if the court or an arbitrator determines the amount that is to be paid by the association to a dissenter, the association must promptly pay that amount to the dissenter.
167 (1) An association must pay the amount to which a dissenter is entitled under section 166 unless there are reasonable grounds for believing that
(a) the association is unable to pay its liabilities as they become due in the ordinary course of business,
(b) making the payments due to all dissenters who, at the time that the payment is due, have complied with their obligations under this Part, in respect of the same resolution, would render the association unable to pay its liabilities as they become due in the ordinary course of business, or
(c) the realizable value of the association's assets would, after making the payments due to all dissenters referred to in paragraph (b) of this subsection, be less than the association's liabilities.
(2) If reasonable grounds exist for believing that payment in full of the amount referred to in subsection (1) would have one or more of the results set out in paragraphs (a), (b) and (c) of that subsection,
(a) the association is prohibited from paying the dissenter the full amount to which the dissenter is entitled,
(b) the association must pay to the dissenter and to all other dissenters to whom payment is required as much of the amount that is payable to them as is possible without causing one or more of the circumstances set out in subsection (1) (a), (b) and (c) to occur, and that payment must be made ratably among all of those dissenters, and
(c) the association remains obligated to pay the balance of the required amount and, as soon as the association is able to do so without causing one or more of the circumstances set out in subsection (1) (a), (b) and (c) to occur, must make that payment along with interest on the amount of that payment calculated
(i) from the date that the association becomes obligated to pay that amount until the date that the amount is paid, and
(ii) at the rate of interest that is used to calculate interest added to a pecuniary judgment under the Court Order Interest Act.
(3) Within 10 days after determining that subsection (2) applies, the association must notify each dissenter
(a) that the association is unable lawfully to pay dissenters the whole amount payable for the dissenters' shares, and
(b) of the rights of dissenters under this section.
(4) If subsection (2) applies, a dissenter, by written notice delivered to the association within 30 days after receiving a notice under subsection (3), may
(a) withdraw the notice of dissent, in which event the association is deemed to consent to the withdrawal, or
(b) retain status as a claimant against the association, to be paid as soon as the association is lawfully able to do so or, in liquidation, to be ranked subordinate to the rights of creditors of the association but in priority to its members and investment shareholders.
168 The association must return to a dissenter each of the share certificates, if any, delivered under section 164 (2), and the dissenter regains the ability to exercise all of the rights and special rights or restrictions attached to the shares of that dissenter and, if applicable, all of the rights, obligations and limitations attached to that dissenter's membership, if
(a) the right of the dissenter to obtain payment of the reasonable value of the dissenter's shares terminates under section 162 or 164 (3), or
(b) the dissenter withdraws the notice of dissent under section 167 (4) (a).
169 A dissenter is deemed to have disposed of all of the dissenter's right, title and interest in and to the dissenter's shares to the association and the association is deemed to have purchased those shares at the time the association pays to the dissenter the amount to which the dissenter is entitled under section 166.
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