Search - contravention

An agreement for the purchase by a corporation of its shares under section 39 is not invalid or unenforceable because of the possibility that the corporation may not be able to comply with section 39, but such agreement is, (a) subject to subsection (2) of section 135, valid if performed; 135. (1) Where any shares of a corporation are acquired by it by redemption, purchase or acceptance for surrender in contravention of this Act or the articles, the directors who voted in favour of or consented to the resolution authorizing the redemption, purchase or acceptance for surrender are jointly and severally liable to the corporation to the extent of the amount paid for the acquisition of the shares. (2) Where any shares of a corporation are acquired by it by redemption, purchase or surrender in contravention of this Act or the articles, (a) any shareholder of the corporation; or (b) where the acquisition is in contravention of subsection (1) of section 38, subsection (3) of section 39 or section 100 any creditor of the corporation who was a creditor at the time of the acquisition, may apply to the court within two years of the acquisition, and the court may, if it considers it to be just and equitable under the circumstances, make an order making any shareholder whose shares were acquired liable to the corporation, jointly and severally with the directors, to the extent of the amount paid to him for his shares. ... The necessary implication to be taken from the legislation is that it contemplates the purchase by a corporation of its common shares in contravention of the Act and notwithstanding what the result will be the transaction shall stand unimpaired. ...

This inevitably involves forming an opinion about whether a contravention has occurred and whether seizure is warranted. [20] I dismissed the motion with brief reasons given from the Bench. ... These elements go directly to the contravention and seizure decisions, and they were properly indicated on the BSF235. [47] For all of the reasons set out above, I am not persuaded that BSO Findlay’s credibility has been called into question. ... As explained previously, I prefer the BSOs’ evidence over that of the Plaintiff on the key elements relating to the contravention finding and subsequent seizure. ...