Mortgage Brokers City Inc.

May 17, 2010 13:27 ET

Ontario Superior Court of Justice Finds Dirty Hands Against Mortgagebrokers.com Inc.

Mortgage Brokers City Inc. found to be entitled to use MortgageBrokersOttawa.com

OTTAWA, ONTARIO--(Marketwire - May 17, 2010) - In the Ontario Superior Court of Justice, Mortgagebrokers.com Inc. et al. sought an interlocutory injunction against Mortgage Brokers City Inc. et al. from using the domain name www.mortgagebrokersottawa.com. On March 31, 2010, Mr. Justice Beaudoin dismissed the injunction.

Mr. Justice Beaudoin reasoned that the claim for injunctive relief would have failed without the consideration of dirty hands but noted that "the plaintiffs do not come to court with clean hands". The plaintiffs continue to withhold commissions from mortgage agents and as such "appear to be in breach of their agreement that they themselves rely on".

Comments from Mr. Justice Beaudoin:

"On October 11, 2005 a licensing agreement was entered into between Elite Mortgage Team operating as 6356591 Canada Inc. as "Mortgage Consultant" and MortgageBrokers.com Financial Group of Companies Inc. as the "Company". Shortly thereafter, individual agents signed agent licensing agreements incorporating the same terms…Under these agreements, lenders advanced money to the plaintiffs who would then receive the commissions and split them with the defendants and the agents".

"In cross-examination, Mr. Haditaghi [Mortgagebrokers.com Inc.] admitted that the commission statements were compliant, that the lenders had advanced the monies and that no agent other than the principals of Mortgage Brokers City had been sued. He refused to indicate his understanding of clause 3.7 and 8.11 of the agent agreement. Paragraph 3.1 [3.7] deals with expenses whereas paragraph 8.11 permits holdbacks in the event of liability to third parties. No such liabilities are claimed. According to the defendants any insurance and other expenses for each agent would have been no more than $300 per agent. According to him, the plaintiffs would be entitled to hold back $12,000 at most".

"The defendants emphasize that the agreement allowed the parties to walk away from their arrangement on 30 days notice. In that event, the plaintiffs' estimated loss of $500 million in revenue [volume] would have still taken place. Mr. Hapke's [Mortgage Brokers City Inc.] evidence is that the only reason why the defendants moved business away within that 30 day period is because Mr. Haditaghi refused to release the held back commissions. While Mr. Haditaghi claimed that $20 million dollars of mortgages had been cancelled with a resulting loss of $200,000 to the plaintiffs, he admitted in cross-examination that the loss would only be $20,000".

"In his pleadings and in his affidavit, Mr. Haditaghi alleges that Mr. Hapke had secretly registered the confusing domain name ottawamortagebrokers.com [mortgagebrokersottawa.com] with a view of setting up a competing business. In fact, the defendants have been openly using the domain name mortgagebrokersottawa.com as well as the e-mail service associated with that name since 2006. The domain name mortgagebrokersottawa.com was owned and registered by the defendant Hapke before the licensing agreement was entered into between the parties".

"The plaintiffs had previously attempted to register a trade mark in the domain name MortgageBrokers.com. This application was rejected pursuant to the provisions of section 12 (1)(b) of the Trade-marks Act since these words are generic and are descriptive of the work that is being carried out".

Ongoing Holdbacks:

The commissions are still being withheld. "As of Febraury 2010, the total amount being held back in commissions for agents and partners exceeded $300,000". On May 4, 2010, each of the individual agents and others have commenced an application in Ontario against Mortgagebrokers.com Inc., Alex Haditaghi (CEO), Daniel Putnam (Principle Broker), Dong Lee (VP Operations) and others for over $550,000 of holdbacks. The application is scheduled to be heard by the Ontario Superior Court on August 5, 2010.

ABOUT MORTGAGE BROKERS CITY INC.

What are you going to do with the time and money you save?

Mortgage Brokers City Inc. understands the stress and the importance of selecting the right mortgage solution depending on your individual needs and situation. That is why their focus has been on establishing an elite group of Accredited Mortgage Professionals to serve you. The Mortgage Brokers City Team has access to an elite mortgage team of Accredited Mortgage professionals across Canada to serve you. With this specially trained group of mortgage professionals, your goals are sure to be met.

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