The applicant, 1179 Hunt Club Inc., and the respondent, Ottawa Medical Square Inc. (OMS), entered into an agreement of purchase and sale for commercial condominium units.
The transaction failed to close.
Hunt Club sought to retain the $250,000 deposit and hold Ms. Mobarak, OMS's president, personally liable under a purported personal guarantee clause.
The court found that neither party was ready, willing, and able to close the transaction on the scheduled date, leading to the termination of the agreement.
Consequently, OMS was entitled to the return of its deposit.
The court also determined that the personal guarantee clause was ambiguous and, applying the contra proferentem rule, did not amount to a personal guarantee by Ms. Mobarak.
Even if it had, her obligations would have been discharged due to a subsequent reinstatement agreement that varied the original contract without her consent as guarantor.