The applicant purchaser and respondent vendor entered into an agreement of purchase and sale for a property intended for a townhouse development.
The agreement included a vendor take back mortgage with a clause reducing the principal amount if the number of approved units was less than the originally planned 18, subject to a $250,000 floor.
The development application faced opposition and the number of units was reduced.
The court was asked to interpret the mortgage terms.
The court found the reduction clause enforceable and not ambiguous, rejecting the vendor's argument that the entire mortgage amount was due if the original application failed.
The court held that the mortgage principal would be reduced according to the formula, subject to the $250,000 floor.
