Background: 660 Sunningdale GP Inc., a developer, signed a financing agreement with First Source Mortgage Corporation to refinance a mortgage on a subdivision project in London, Ontario. The loan was for the lesser of $15,500,000 or 62% of the property's appraised value. The developer paid a $100,000 deposit but later terminated the agreement, seeking financing elsewhere.

Claims:

• Lender’s Claim: Sought $326,500 as the remaining fee after the $100,000 deposit, plus interest, damages, and legal fees.
• Developer’s Counterclaim: Argued the lender made unreasonable demands that changed the terms, amounting to a breach of contract and bad faith.

Legal Issues:

1. Fault in terminating the commitment.
2. Lender's bad faith through unreasonable demands.
3. Whether the lender’s fee was an unenforceable penalty.
4. Appropriateness of summary judgment.

Decision: The court could not conclusively determine fault but found the lender's demands justified the developer's termination. It ruled that $326,500 of the lender's fee was an unenforceable penalty, while the $100,000 deposit was valid as a pre-estimate of damages.

Outcome: The developer, 660 Sunningdale GP Inc., was awarded $326,500. The lender retained the $100,000 deposit. Costs are to be decided upon further submissions if not mutually agreed.

Successful Party: The developer, 660 Sunningdale GP Inc.

Total Monetary Award: $326,500 to the developer; lender retains $100,000 deposit. Costs to be determined.