Mortgage Architects.indd 1 14-10-14 3:24 PM
MortgageBroker mbabc.ca fall 2014 | 37
him by telephone when it was not signed and
returned. Mrs. St. Louis testified that she never
saw the waiver and received no telephone
messages from the broker. e broker felt that
a telephone discussion with one of his two
clients was sufficient.
e court made the following important
points in finding in favour of the mortgagors:
(1) e broker knew of the importance of
mortgage life insurance, knew he needed to
obtain an application for coverage or a waiver
declining coverage but neither were done.
(2) e broker mailed a waiver to Mr. St.
Louis but, knowing it was important, should
have had his clients in to his office personally
to obtain a signed form as he had done with
all the other forms the clients were required to
sign in the mortgage process.
(3) e broker knew that both Mr. and Mrs.
St. Louis were his clients and joint instructions
were required. Without instructions from both
clients, the broker had no instructions at all.
It is easy to see from this decision the
importance of identifying your client and
knowing whether you have one or two clients
as you are exposed to risk if you have two
clients and only obtain instructions from one.
is decision also emphasizes the importance
of making sure both you and your client(s)
understand what is and what is not included
with the mortgage and, of course, that you
obtain confirmation from your clients when
they decline optional features.
•
Disclaimer
is article is not intended to be a substitute
for legal advice but is intended to help brokers
avoid getting involved in lawsuits. If you
think you may get sued by a client or former
client we strongly encourage you to report the
potential claim to your insurance broker and
seek legal advice as soon as possible.
Nigel Trevethan is a partner at Harper Grey
LLP,
one of Western Canada's largest litigation
based firms. He is the chair of the firm's
insurance law group and focuses on working
with self-insured professionals and organizations
helping them reduce risk. Nigel defends
mortgage brokers, appraisers, home inspectors,
podiatrists, physicians and other professionals.
Steven Abramson is an associate at Harper Grey
LLP. His practice is focused on insurance defence
work including the defence of mortgage brokers,
contractors, homeowners and others who have
purchased insurance.
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