Daniel Silla of FCL LLP successfully defended a mortgage brokerage client at trial in April 2024.

In the main action, the Plaintiff alleged that his mortgage agent and brokerage were negligent and liable negligent misrepresentation after the Plaintiff failed to close on the purchase of a property in Brantford, Ontario (the “Property”).  While the Plaintiff secured a suitable mortgage commitment from an institutional lender well in advance of the closing date, the mortgage proceeds were not advanced in time for the intended closing on June 28, 2018, or the extended closing date of July 13, 2018.  As a result, the Plaintiff sought to recover $11,000 in pecuniary damages for the forfeited deposits and associated fees following the failed purchase of the Property and $5,000 in aggravated damages.  The Plaintiff sued the mortgage agent and brokerage that assisted him with the transaction (the “Defendants”) for his financial losses.

The Defendants denied any liability in the main action and issued a Defendant’s Claim against our client (the “Third Party Brokerage”) alleging that one of its mortgage agents was solely responsible for assisting the Plaintiff with securing mortgage financing.  The Defendants asserted that any broker related failings were the responsibility of the Third Party Brokerage.

In turn, the Third Party Brokerage denied that they acted for the Plaintiff in connection with the proposed mortgage financing but, in fact, acted as the brokerage representing the lender.

The trial judge found there was no evidentiary basis for finding that the Defendants or the Third Party Brokerage were responsible for any act or omission that could be connected to the lender’s failure to finance the purchase in time for the original and extended closing dates.  Notably, the trial judge also found that the Plaintiff did not rely on the Third Party Brokerage or its mortgage agent in connection with the failed purchase or the lost deposits.

In the absence of sufficient proof to establish causation and a breach of the standard of care, the main action and the Defendants’ Claim were dismissed with costs to be determined.