The parents claimed the broker falsely represented them as the borrowers when it was in fact their children. In particular the application included a false contract naming the parents as purchasers.
The parents sought relief under the Contracts Review Act and cross-claimed against the broker.
The trial judge disbelieved the parents and believed the broker and refused relief.
The parents appealed–not on a legal technicality–but rather on the basis that the trial judge’s decision to believe the broker was patently wrong.
Findings of credit by a trial judge can only be overturned if the findings are glaringly improbable, or if it can be shown that the judge has acted on facts which were inconsistent with the evidence.
The appeal court found that the trial judge should have considered the sham contract and whether the broker’s denial of knowledge of these matters was glaringly improbable, given he was involved in obtaining finance for its purchase.
The court found that the trial judge did not address a number of critical factors including the implausibility of the parent’s application for refinance, the broker’s file note of meeting the parents, the information missing from the broker’s notes, the sham contract supplied to the lender by the broker and whether the lender knew or ought to have known that the parents did not have the capacity to make the payments.
The appeal court by a majority of 2:1 ordered a new trial and set aside the orders for possession.