Background: Dominic and Kelsi Urban, as personal guarantors for a corporate debt of 2101705 Alberta Ltd., sought release from a mortgage on their residence used as security for their obligations.
Primary Legal Issues:
Responsibility for Jovica Debt: Whether West, after acquiring properties with a Jovica Mortgage, assumed responsibility for the underlying debt (Jovica Debt).
Indemnity: Whether the Asset Purchase Agreements (APAs) provided indemnity to the Urbans and related entities regarding the Jovica Debt.
Release from Obligations (Novation): Whether a novation occurred that released the Urbans and related entities from their guarantee obligations.
Equitable Release: Whether the Urbans should be released from their guarantees due to changes in the debt's nature.
Court's Findings:
Assumption of Debt: West assumed the mortgage encumbrance but not the underlying Jovica Debt; no waiver of claims against the Urbans.
Indemnity: The Urbans were not entitled to indemnity under the APAs.
Novation: No novation was found; the Urbans remained liable under the guarantees.
Equitable Release: The court held it was not inequitable to enforce the guarantees against the Urbans.
Conclusion: The application by the Urbans to be released from their obligations was dismissed.
Outcome:
Successful Party: Third Party Respondents: Enright West Ltd and Enright Monterra G.P. Ltd.
No specific monetary awards, damages, or costs were specified. Cost determinations are left open for further submissions.
