Key Points

• 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:
  1. Responsibility for Jovica Debt: Whether West, after acquiring properties with a Jovica Mortgage, assumed responsibility for the underlying debt (Jovica Debt).
  2. Indemnity: Whether the Asset Purchase Agreements (APAs) provided indemnity to the Urbans and related entities regarding the Jovica Debt.
  3. Release from Obligations (Novation): Whether a novation occurred that released the Urbans and related entities from their guarantee obligations.
  4. 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.