Associates Capital Services Corp. v. Multi Geophysical Services Inc. and Kondrat, (1987) 82 A.R. 293 (QB)

• Judge: Hutchinson, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: July 29, 1987
• Citations: (1987), 82 A.R. 293 (QB)

Assoc. Capital v. Multi Geophysical (1987), 82 A.R. 293 (QB)

MLB headnote and full text

Associates Capital Services Corp. (plaintiff) v. Multi Geophysical Services Inc. and Steve A. Kondrat, also known as Seine A. Kondrat (defendants)

(No. 8301-00222)

Indexed As: Associates Capital Services Corp. v. Multi Geophysical Services Inc. and Kondrat

Alberta Court of Queen's Bench

Judicial District of Calgary

Hutchinson, J.

July 29, 1987.

Summary:

Kondrat and his company (Multi Geophysical Services) entered a conditional sales agreement respecting the purchase of radios from Motorola. Kondrat subsequently executed a guarantee. The decision to obtain a guarantee was initiated by Associated Capital Services Corp. (the plaintiff) which was the company to which Motorola intended to assign the conditional sales agreement. Associated Capital Services subsequently commenced an action against Multi Geophysical Services and Kondrat to collect on the guarantee. Kondrat resisted alleging, inter alia, non est factum, a lack of consideration and noncompliance with the Guarantees Acknowledgment Act (Alta.).

The Alberta Court of Queen's Bench held that the guarantee was valid and ordered Kondrat to pay the amount due Associated Capital Services. The court rejected the defence of non est factum and held that the question of consideration was irrelevant where this was a continuing guarantee. The court held further that the Guarantees Acknowledgment Act did not apply to this guarantee, because it was governed by California law.

The court opined however that had Alberta law applied, the guarantee would have been void because of the lack of an acknowledgement as required by the Guarantees Acknowledgment Act.

Guarantee and Indemnity - Topic 124

The contract - Formation of - Non est factum - General - Kondrat executed a guarantee agreement - He later argued that the agreement was not complete when it was signed and he should not be held liable on the basis of non est factum - The Alberta Court of Queen's Bench held that even if the guarantee was incomplete, Kondrat in signing the agreement did not act with the degree of reasonable care as would entitle him to rely on non est factum - See paragraph 18.

Guarantee and Indemnity - Topic 144

The contract - Consideration - What constitutes - Kondrat executed a conditional sales agreement for the purchase of radios - The radios were shipped by the vendor - Before the radios were received, Kondrat executed a guarantee - He argued that the guarantee was invalid for lack of consideration - The Alberta Court of Queen's Bench rejected this argument holding that this guarantee was a continuing guarantee and "the fact that the conditional sales contract and the date of the shipment of the radios predates the guarantee becomes irrelevant with respect to whether the consideration for the guarantee had already past before the guarantee was actually given" - See paragraphs 19, 20.

Guarantee and Indemnity - Topic 184

The contract - Form - Statutory execution requirements - Exemptions - Kondrat executed a conditional sales agreement respecting the purchase of radios from Motorola - A few days later Kondrat also executed a guarantee - The decision to obtain the guarantee was initiated by Associates, a company to which Motorola intended to assign the conditional sales agreement - The guarantee did not contain an acknowledgment as required by the Guarantees Acknowledgment Act (Alta.) - Associates argued that the guarantee was exempted from the Act, because it was a guarantee "given on the sale of an interest in goods" (s. 1(a)(iv)) - The Alberta Court of Queen's Bench opined that the guarantee was not "given on the sale" because it was continuing in nature and was executed at the request of the Associates, the assignee, rather than the vendor - Therefore, the exemption would not apply - See paragraphs 21 to 32.

Words and Phrases

Given on the sale - The Alberta Court of Queen's Bench discussed the meaning of this phrase as it appeared in s. 1(a)(iv) of the Guarantees Acknowledgment Act, R.S.A. 1980, c. G-12 - See paragraphs 21 to 32.

Cases Noticed:

J.H. Ashdown Hardware Company Limited v. Singer, Belzberg and Kluner (1951), 3 W.W.R.(N.S.) 145, refd to. [para. 17].

Marvco Color Research Ltd. v. Harris et al., 45 N.R. 302; 141 D.L.R.(3d) 577, refd to. [para. 18].

Saunders (Executrix of the Estate of Rose Maud Gallie (deceased) v. Anglia Building Society (formerly Northampton Town and Country Building Society), [1970] 3 All E.R. 961, refd to. [para. 18].

Robert Simpson Company Limited v. Balalaika Restaurants Ltd., Lah and Zogar, 27 A.R. 344; 12 Alta. L.R.(2d) 41, consd. [para. 24 et seq.].

Canadian Acceptance Corporation Limited v. Evanson et al., [1971] 1 W.W.R. 457, refd to. [para. 26].

Goodyear Tire & Rubber Company of Canada Ltd. v. Knight and Kunzli and Russill (1960-61), 33 W.W.R.(N.S.) 287, refd to. [para. 27].

Crown Lumber Company Limited v. Engel and Engel (1961-62), 36 W.W.R.(N.S.) 128, refd to. [para. 27].

Statutes Noticed:

Guarantees Acknowledgment Act, R.S.A. 1980, c. G-12, generally [para. 15]; sect. 1(a)(iv) [para. 21]; sect. 3 [para. 22].

Counsel:

D.P. Macquire, for the plaintiff;

H.R. Vickers, for the defendant.

This case was heard before Hutchinson, J., of the Alberta Court of Queen's Bench, Judicial District of Calgary, who delivered the following decision on July 29, 1987.