This was a dispute about loan brokerage secured by caveats. The issue before the court was whether the broker was entitled to brokerage of $12,485 or alternatively whether the borrower was entitled to the return of $3,300 which was paid in advance pursuant to the brokerage agreement. Associate Justice Bryson held:
…unless there was some performance and some loan approval was obtained which fitted in with either what was proposed in the Proposal … there could be no entitlement to payment of a fee.
The ordinary approach to entitlement to payment under a commission arrangement such as this is that payment for work done is earned when the commission is fully carried out and completed and, if less is done, no payment is earned unless there are express terms in the retainer agreement overriding this.
The retainer agreement contained “Special Conditions”, none of which were fulfilled by the broker. The retainer also provided that commission was payable to the plaintiff upon “delivery of an approval in principle from one of our underwriters”. It was found that the loan structure offered to the defendants by a prospective mortgagee did not constitute an approval in principle as the loan structure differed significantly from what was applied for. It was therefore held that the plaintiff was not entitled to recover the fee of $12,485 and hence that the plaintiff did not have an entitlement to lodge caveats. The broker also had to return the $3300 because it was paid for a consideration which had wholly failed.