Vartoch had his eye on some land at the edge of town that he thought would be the perfect location for a restaurant with a take out drive through. It was close enough to the town that people could easily drive to it and it was large enough to accommodate a substantial parking lot and the driveway for take out. Vartoch approached Wanda with his business plan and she loaned him $300,000.00, which was secured by a mortgage on the property when he purchased it. For over a year Vartoch struggled to get planning permission from the town for his project. The longer his application took, the harder it was becoming for him to be able to make the payments under the mortgage as Vartoch’s funds were used up in making his application and arguing with the town council.
Unknown to Vartoch, the reason the town’s approval was delayed was because of discussions the town was having with the province about a new highway that was being planned that would pass very close to the property that Vartoch owned, but the final decision and when construction would begin were still unknown. Wanda, as a member of the town council, was aware of the plans being discussed relating to the highway and that the value of Vartoch’s property would go up considerably once the highway was approved. Needless to say, Wanda could not say anything about the highway plans, as they were confidential. Eventually, Vartoch defaulted in his payments under his mortgage with Wanda. Wanda, having heard that you took an excellent course in business law, has come to you to ask your advice on what her course of action should be. She confirms to you that the mortgage is in default for two months and Vartoch is unable to make any payments.
what are the issues with this scenario???