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FOR TORTS - Fraud and misrepresentation

Tuesday, March 28, 2017 @ 6:36 AM  


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Appeal by the defendant, Gemnay, from a civil fraud judgment in favour of the plaintiff, Nicholson. The plaintiff was a recent widow with a grade 8 education and two young children. The defendant was a friend of her late husband. The plaintiff gave the defendant $200,000 to use for investments. The defendant emphasized he would not do anything to jeopardize the funds. The defendant proceeded to invest in call options using his own personal accounts, resulting in a total loss. The defendant repaid $8,000. The plaintiff sued to recover the remainder. The trial judge made adverse credibility findings against the defendant, and granted the plaintiff judgment for $192,000, plus pre-judgment interest, punitive damages of $25,000, and costs of $85,000. The defendant appealed.

HELD: Appeal dismissed. Although the reasons for judgment were less than ideal, they permitted effective appellate review. Read as a whole, and in the context of the evidentiary record, the trial judge's reasons disclosed the basis of the decision. The evidentiary record supported the trial judge's finding of fraud, and an absence of consent or acquiescence on the part of the plaintiff in respect of the defendant's trading activities. There was no basis to interfere with the award of punitive damages based on the finding the defendant had preyed on a trusting, naïve and vulnerable widow.

Nicholson v. Gemnay, [2017] O.J. No. 1064, Ontario Court of Appeal, H.S. LaForme, S.E. Pepall and G.I. Pardu JJ.A., March 2, 2017. Digest No. 3644-006