COVID-19 Legal Update: Amendments to the Guarantees Acknowledgement Act (Alberta)

August 25, 2020

The Guarantees Acknowledgement Act (Alberta) has been amended to permit two-way video conferencing and counterpart execution for any certificate(s) required to be completed thereunder.

Guarantees Acknowledgment Act (Alberta)

The Guarantees Acknowledgment Act (Alberta) (the “Act”) applies to every guarantee (“a deed or written agreement whereby a person, not being a corporation, enters into an obligation to answer for an act or default or omission for another” – Act, s. 1(a)) that is:

(a) not a bill of exchange, cheque, promissory note, partnership agreement, bond or recognizance given to the Crown or to a court or pursuant to a statute, and guarantee given on the sale of an interest in land or an interest in goods or chattels; and

(b) entered into on or after September 1, 1969,

provided that, the proper law of the undertaking with respect to such guarantee is the Province of Alberta, regardless of the jurisdiction in which such guarantee is executed.

The requirements of the Act are unique to the Province of Alberta and its application with respect to guarantees has been the subject of substantial judicial consideration. Whether a document constitutes a guarantee for purposes of the Act should be considered on a case-by-case basis with legal advice.

Prior to enacting the GAA Amendments (as defined below), the Act required, among other things, that any person (other than a corporation) executing a guarantee to which the Act applies, to appear in the physical presence of a lawyer (as defined in the Act) in order to execute a certificate (a “GAA Certificate”) in the form prescribed by the regulations thereunder.

(Referenced: CED 4th (online), Guarantee, Indemnity and Standby Letters of Credit, “Alberta Guarantees Acknowledgment Act” (VI.5); Kevin McGuiness, The Law of Guarantee, 3rd ed (Toronto: LexisNexis Canada, 2013); Canaccord Capital v 884003 Alberta Inc., 2003 BCSC 1565; TFS RT Inc. v Dyck, 2018 ONSC 2617.)

COVID-19 Amendments

On June 26, 2020, Bill 24: COVID-19 Pandemic Response Statutes Amendment Act, 2020 (“Bill 24”) received royal assent and came into force in the Province of Alberta, with retroactive effect from May 8, 2020 (the “Effective Date”).

Among other things, Bill 24 legislates amendments to the Guarantees Acknowledgment Act (Alberta) (the “Act”) ordered by the Minister of Justice and Solicitor General of the Province of Alberta (collectively, the “GAA Amendments”) on the Effective Date, pursuant to Ministerial Order 29/2020 (Alberta) (“M.O. 29/2020”).

To comply with physical distancing measures, Bill 24 amends the requirement for a GAA Certificate to be executed in the physical presence of a lawyer, by permitting two-way video conferencing and counterpart execution (collectively, “Electronic Confirmation”).

For the period commencing on August 15, 2020 up to and including August 15, 2022, lawyers are permitted to use Form 2, as set forth in the schedule to the amended regulations under the Act (the “Amended Regulations”) for purposes of completing a GAA Certificate by means of Electronic Confirmation.

Any guarantee subject to the Act will have effect if the person entering into such obligation:

(a) appears before a lawyer by two-way video conferencing;

(b) acknowledges to the lawyer that the person executed the guarantee; and

(c) can be seen by the lawyer during the two-way video conference to sign a GAA Certificate in the form prescribed by the Amended Regulations,

provided, that:

(i) if such guarantee is acknowledged in accordance with the paragraphs above or in accordance with M.O. 29/2020, identical copies of such GAA Certificate (without regard to any minor, non-substantive differences in format or layout between such copies) may be executed in counterpart; and

(ii) such GAA Certificate is attached to or noted on the instrument containing the guarantee to which such GAA Certificate relates.

(Referenced: Act; Bill 24; Guarantees Acknowledgment Forms Regulation (Alberta), as amended by Guarantees Acknowledgement Forms Amendment Regulation, pursuant to Ministerial Order 46/2020 (Alberta).)

Conclusion

The GAA Amendments represent a practical, modern response to the COVID-19 pandemic. Execution of a GAA Certificate by means of Electronic Confirmation facilitates physical distancing by making use of widely-available technology.

Further, execution of a GAA Certificate by means of Electronic Confirmation may take place anywhere in the world, provided that, the individual and the lawyer executing such GAA Certificate have the necessary technology to do so.

The author would like to acknowledge the support and assistance of Taylor Sakon, articling student at law.

DISCLAIMER: This publication is intended to convey general information about legal issues and developments as of the indicated date. It does not constitute legal advice and must not be treated or relied on as such. Please read our full disclaimer at www.stikeman.com/legal-notice.

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