The plaintiff purchaser moved for summary judgment seeking return of $1.2 million in deposits paid under an aborted real estate transaction, while the defendant vendor cross‑moved for summary judgment declaring its entitlement to retain the deposits.
The dispute centred on whether the vendor improperly refused to accept a proposed subordination and standstill agreement relating to secondary financing and thereby prevented closing.
The court held that the agreement of purchase and sale permitted secondary financing only if the secondary lender subordinated its rights to the vendor’s vendor‑take‑back mortgage and related security provisions, including an escrow deed provision and an escalator clause.
The purchaser’s proposed financing arrangements would have impaired those security rights and therefore did not comply with the contract.
The court concluded the purchaser failed to close and the vendor was entitled to retain the deposits.