Disclosure by director of interest in contracts
17. (1) Every director of a corporation who has, directly or indirectly, any interest in any contract or transaction to which the corporation is or is to be a party, other than a contract or transaction in which the director’s interest is limited solely to his or her remuneration as a director, officer or employee, shall declare his or her interest in such contract or transaction at a meeting of the directors of the corporation and shall at that time disclose the nature and extent of such interest including, as to any contract or transaction involving the purchase or sale of property by or to the corporation, the cost of the property to the purchaser and the cost thereof to the seller, if acquired by the seller within five years before the date of the contract or transaction, to the extent to which such interest or information is within his or her knowledge or control, and shall not vote and shall not in respect of such contract or transaction be counted in the quorum. Interest to be material (2) Subsection (1) does not require the disclosure of any interest in any contract or transaction unless the interest and the contract or transaction are both material. When declaration of interest to be made (3) The declaration required in subsection (1) shall be made at the meeting of the directors at which the proposed contract or transaction is first considered, or if the director is not at the date of the meeting interested in the proposed contract or transaction, at the next meeting of the directors held after he or she becomes so interested, or if the director becomes interested in a contract or transaction after it is entered into, at the first meeting of the directors held after he or she becomes so interested, or if a contract or a proposed contract or transaction is one that in the ordinary course of the corporation’s business would not require approval by the directors or owners, at the first meeting of the directors held after the director becomes aware of it. Effect of declaration (4) If a director has made a declaration and disclosure of his or her interest in a contract or transaction in compliance with this section and has not voted in respect of the contract or transaction at the meeting of the directors of the corporation, the director, if he or she was acting honestly and in good faith at the time the contract or transaction was entered into, is not by reason only of holding the office of director accountable to the corporation or to its owners for any profit or gain realized from the contract or transaction, and the contract or transaction is not voidable by reason only of the director’s interest therein. Confirmation by owners (5) Despite anything in this section, a director, if he or she was acting honestly and in good faith, is not accountable to the corporation or to the owners for any profit or gain realized from any such contract or transaction by reason only of holding the office of director, and the contract or transaction is not by reason only of the director’s interest therein voidable, (a) if the contract or transaction is confirmed or approved by at least two-thirds of the votes cast at a meeting of the owners duly called for that purpose; and (b) if the nature and extent of the director’s interest in the contract or transaction are declared and disclosed in reasonable detail in the notice calling the meeting. General notice of interest (6) For the purposes of this section, a general notice to the directors by a director declaring that he or she is a director or officer of or has a material interest in a person that is a party to a contract or proposed contract with the corporation is a sufficient declaration of interest in relation to any contract so made. R.S.O. 1990, c. C.26, s. 17.