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Repayment agreement signed by corporate shareholders constituted an indemnity creating personal liability under AMPA.
The plaintiff brought a motion for a preliminary determination of two questions of law regarding a subrogated claim for indebtedness under the Agricultural Marketing Programs Act (AMPA).
The Court held that the Manitoba Pork Credit Corporation was an "administrator" within the meaning of s. 2(1) of AMPA, as it is a legal person with the power to sue and be sued in its own name, regardless of extra-provincial registration in Alberta.
The Court also determined that the individual defendants' execution of the repayment agreement constituted an indemnity, not a guarantee, rendering them personally liable despite lacking a certificate under Alberta's Guarantees Acknowledgement Act.
Bankruptcy forfeiture clause in construction subcontract voids anti-deprivation rule.
The appellant general contractor sought to enforce a subcontract clause that imposed a ten-percent forfeiture of the subcontract price upon the respondent subcontractor's bankruptcy.
The majority held that the anti-deprivation rule, a longstanding principle of Canadian common law, renders void any contractual provision that is triggered by insolvency and removes value from the insolvent's estate that would otherwise have been available to creditors.
Applying an effects-based test, the majority found that clause VII Q(d) constituted a direct violation of the anti-deprivation rule and could not be rescued by the law of set-off.
Côté J. dissented, concluding that the anti-deprivation rule should incorporate a bona fide commercial purpose element derived from its common law origins, and that the clause at issue served such a purpose.
