|Agency and Trust Agreement (“ATA”)
Question & Answer
As the Company (the “Beneficiary”) is no longer able to hold an unexecuted crown transfer document as evidence that the crown title document is held in trust by the Broker, the ATA was developed to provide the Beneficiary with a document to hold on its title document file. The ATA provides evidence of beneficial ownership and includes provisions which clarify the trust and agency relationship between the Broker (the Land Agent) and the Beneficiary.
Q1. Who prepares the ATA?
A. Unless otherwise agreed to, the Broker should prepare it as part of the package it delivers to the Beneficiary post acquisition.
Q2. What date do we use for the Effective Date?
A. The Document Date (See Q 7) is the most likely. However, it may be a subsequent date if the Broker changes and the Beneficiary enters into a new ATA with the new Broker (for example, when the original parties elect Alternate A in clause 9)
Q3. How do we complete the ATA if multiple companies jointly acquire a title document?
A It is recommended that the Operator under the governing agreement, if there is one in place, or the Company submitting the bid sign this agreement on behalf of all parties. Clause 9 provides for subsequent assignment.
Q4. How detailed must the “Lands” section be?
A. It should include the legal description and the mineral rights included in the title document.
Q5. Can we use the ATA for more than one document?
A. The ATA is intended to replace the unexecuted transfer form and to be used for only one title document. This allows the assignment of this agreement separately and individually by the Beneficiary and provides the Beneficiary with an original for each of its files.
Q6. What is “the Document”?
A. This is number of the title document for the Lands.
Q7. What is the Document Date?
A. The effective date of the Document which is held in trust.
Q8. Why do we need the Broker and Beneficiary File numbers?
A. For ease of use by both the Broker and Beneficiary; data is optional.
Q9. Can the ATA be used for freehold title documents?
A. The ATA could be used for freehold, however, as the committee intentionally chose to focus its review on crown documents only, consideration must be given to the current practice of holding on your files the Assignment of Freehold Lease (which may or may not have been executed and sent to the lessor) and the unregistered Transfer of Caveat.
Q10. What is the difference between Alternate A & B in clause 9?
A. The choice of which alternate to use must be agreed to by the Broker and Beneficiary.
Alternate A provides that the ATA may only be assigned by the Beneficiary and may be done by using a Notice of Assignment. It may not be assigned by the Broker. A new ATA is required if the Broker wishes to assign its interest.
Alternate B provides that the ATA may not be assigned by either party. A new agreement must be entered into if either party assigns its interest in the documents.
Agency and Trust Agreement (“ATA”) - Question & Answer
Alternate wording that can be substituted for Alternate A or B can be used as follows:
“This agreement shall enure to the benefit of and shall be binding upon the respective successors and permitted assigns of the Broker and the Beneficiary. Any assignment of interest in this agreement shall be made in accordance with the 1993 CAPL Assignment Procedure”.
A more conservative company may wish to use an Assignment and Novation due to the special legal nature of a trust relationship and the duties it imposes on the trustee. In that circumstance, you can replace the words “1993 CAPL Assignment Procedure” with “an Assignment and Novation Agreement”.
Q11. Why are there no addresses for service?
A. They were not included as the Committee wanted to keep the ATA “user-friendly” and not create any obligations with respect to change of address notices. Addresses for Service should be covered under separate arrangements between the parties. However, if desired, addresses could be included following the Broker’s and Beneficiary’s names at the top of the ATA.
Q12. Why is there no mention of an annual fee to the Broker?
All fees and other arrangements between the Broker and the Beneficiary should be negotiated outside of the ATA. The Broker’s schedule of fees may change from time to time and it would be cumbersome to continually revise the ATA to reflect these changes.
Q13. Can the ATA be used for historical documents?
A. Yes, however this should be discussed with the Broker due to the administrative costs that may be associated with preparation of a large number of separate ATAs.
Q14. In clause 1, what is a bare trustee?
A. It is a trustee that holds property without any further duty to perform except to convey the property to the beneficiary upon the beneficiary’s demand. A bare trustee has no personal beneficial interest in the property. Even without the execution of this ATA, a bare trust is the type of trust which exists in equity between the Broker and the Beneficiary.
Q15. Can I alter the language or format of the ATA?
A. Yes, however, the Committee encourages it be used in its current format as it is intended to function as an industry precedent and any revisions should be highlighted. Should you determine significant changes are required, we would appreciate the feedback as perhaps those changes would benefit others and could be incorporated in a future ATA. As well, if you alter the language the CAPLA Approved footer is to be removed.
Q16. How many copies of the ATA are required?
A. As a minimum it should be prepared in duplicate.
Q17. Can the ATA be sent by email?
A Yes. The e-mail use of the ATA (including the execution and follow up process) should be discussed and agreed to by both the Broker and the Company.
Q18. Why does the form reference "Company" rather than "Corporation"?
A. Due to recent legislative changes in Alberta and B.C., a legal entity which used to be a "company" is now referred to as a "corporation" - only some non-profit organizations remain "companies". However, the Committee did not use the term "corporation" as it believes that Industry is more accustomed to "Company".