Executive Summary: Key Legal and Evidentiary Issues

• Whether a statutory Certificate under Alberta’s Guarantees and Acknowledgement Act can validate a guarantee obtained through impersonation and fraud.

• The impersonation of Zhao using his driver’s license resulted in a forged Indemnity Agreement and Certificate, without his knowledge or consent.

• Although the Certificate appeared valid on its face, Zhao never met the lawyer, never signed the documents, and had no role in the transaction.

• Plaintiff argued section 5 of the Act made the Certificate conclusive, but the Court rejected this where fraud nullified actual consent.

• Justice Malik clarified that section 5 does not override the Act’s consumer protection purpose when the guarantee is obtained through deceit.

• The Court set aside the Applications Judge’s ruling and granted Zhao’s application for summary dismissal, finding no enforceable contract existed.

Facts of the case

Diamond-Dun Properties Ltd. leased a commercial premise to 2138809 Alberta Ltd. under a Lease Agreement signed by directors Ming Xu and Anton Wootliff. Clause 12 of the Lease required that Xu, Wootliff, and Yinan Zhao provide full indemnities on the Plaintiff’s standard Indemnity Agreement. A document dated January 11, 2019, appeared to show Zhao as an indemnifier with his signature witnessed by Xu and certified by a lawyer under section 5 of the Guarantees and Acknowledgement Act.

Zhao, however, was a passive investor who sold his shares in August 2019. He denied any involvement with the Lease Agreement, stating that he had not attended the meeting where the documents were signed and had not authorized the use of his name. He had given Xu his driver’s license on the understanding that Xu would “take care of everything” during Zhao’s absence. Zhao later learned that Xu had provided the license to a man named Liu who impersonated Zhao before the lawyer and forged the signatures on both the Indemnity Agreement and the Certificate.

Xu confirmed all of this in a de bene esse examination, admitting he arranged for Liu to impersonate Zhao and had also forged Zhao’s signature on the Amended Lease Agreement. The Plaintiff did not cross-examine Zhao or Xu and presented no evidence refuting these claims.

Policy terms and statutory provisions

The legal issue focused on whether section 5 of Alberta’s Guarantees and Acknowledgement Act rendered the forged Certificate conclusive proof of compliance. Section 5 states that a Certificate that is “substantially complete and regular on the face of it,” and “accepted in good faith” is conclusive proof that the Act has been complied with. The Plaintiff argued this provision barred any challenge to the Certificate.

However, the Act’s purpose, as affirmed in Teachers’ Investment and Ronsdale, is consumer protection—ensuring that ordinary individuals understand their obligations before signing guarantees. Courts have acknowledged section 5 limits defences such as non est factum in most cases but have not foreclosed all defences, especially where fraud is involved.

Justice Malik distinguished the Plaintiff’s cited authorities, noting that none involved impersonation or forgery. He emphasized that the statutory safeguard of section 5 could not override the fact that Zhao was unaware and did not agree to the guarantee. Therefore, the guarantee was a nullity.

Outcome of the case

The Court ruled that Zhao never agreed to the guarantee and was unaware of its execution. Because the Certificate was procured through fraud, it was not binding on him, despite being facially valid. The Plaintiff’s reliance on the Certificate was not sufficient to establish an enforceable contract.

Justice Malik held that enforcing such a guarantee would contradict the consumer protection aims of the Act. He concluded that no authority supported binding a person to a contractual obligation forged without their knowledge. The Court set aside the Applications Judge’s ruling, denied the Plaintiff’s summary judgment motion, and granted Zhao’s cross-application for summary dismissal.

The decision was issued on March 10, 2025, and Zhao was awarded costs unless otherwise agreed upon by the parties. No amount was stated.