Blaney McMurtry commercial litigation partner Varoujan Arman recently won a Court of Appeal case involving the enforcement of a commitment letter for a mortgage broker who had arranged substantial lending facilities for a borrower. Varoujan acted for the plaintiff mortgage broker, and was successful in obtaining judgment on a summary judgment motion before Justice Cavanagh, requiring the borrower to pay the broker its commitment fee, which was deemed earned under the commitment letter. The lender appealed the decision. The Court of Appeal held that the Supreme Court of Canada’s landmark decision in Creston Moly Corp v Sattva Capital Corp applied, and confirmed that the Justice Cavanagh did not error in his interpretation of the commitment letter, and a subsequent amending agreement wherein the parties agreed to revise the terms of the loan. Crucial to the Court of Appeal’s decision dismissing the appeal was the finding that it would not have made commercial sense for the mortgage broker to agree in the amending agreement, to walk away from its commitment fee, which it had already earned under the original commitment letter.
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