Unlicenced BC mortgage broker sues over unpaid commission
In an audacious move, a BC mortgage broker who worked without a license has taken his former employer to court arguing for the commission he made while on the job.
Former mortgage broker Styles William Stewart argued he'd signed a contract with National Equity Lending Corp. and it owed him $5,400 in commission regardless of the fact he'd lost his licence and was being investigated by the BC Financial Services Authority at the time.
According to a July 29 BC Civil Resolution Tribunal decision, Stewart got the job as a sub-mortgage broker with National Equity Lending in October 2021.
However, Stewart has just been fired by another brokerage and had his licence pulled.
National Equity Lending didn't realize this and it was only after Stewart had been working there for six months that it found out from the regulator.
Stewart was promptly fired for being unregistered which he acknowledged, "I would do the same thing," the decision says.
However, Stewart then took the company to the online small claim courts arguing it still hadn't paid him the commission for five loans he'd arranged weeks before getting the boot.
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In the decision, Stewart argued he had a contract with National Equity Lending saying they'd pay him a commission and under contract law, it had to pay.
The decision says after it fired Stewart, the company asked him to "adjust and update forms" so clients wouldn't be affected. There's no mention of how much money the company made from Stewart's loans.
The Tribunal said letting the unauthorized broker update the paperwork undermined the company's position not to pay the commission.
However, the Tribunal said Stewart's argument was "weaker".
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"I find this is an illegal contract, which means Mr. Stewart is unable to depend upon it in this dispute," the Tribunal ruled. "If I were to find Mr. Stewart was able to rely on their contract to be paid despite their illegal performance of sub-mortgage broker duties, it would permit them to profit from breaking the law."
"Mr. Stewart knowingly continued to act as a sub-mortgage broker despite being unregistered... I find the illegal contract is unenforceable," the Tribunal ruled.
After being fired from National Equity Lending in June 2022 Stewart worked for his own company First Expanse Financial and continued to make $56,000 in commission processing mortgages without a licence according to the BC Financial Services Authority.
In February 2023 the regulator issued him a cease and desist order.
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