(Jamaica Gleaner) A financial institution has been ordered by the Supreme Court to pay US$70,000 with interest to one of its customers who was given wrong advice by one of its employees to invest her money in the failed investment scheme Cash Plus Ltd.
Supreme Court judge Bertram Morrison yesterday ordered RBTT Securities Jamaica Ltd, which is an arm of the recently rebranded RBC, to pay the money to Yvonne Powell.
Powell, who was represented by Queen’s Counsel Lord Anthony Gifford, filed a suit against RBTT in 2008 for breach of contract and negligent advice given to her by one of its servants or agents.
The court heard evidence that, following a discussion that Powell had in 2006 with Alvarine Smalling, an investment and securities broker employed to RBTT at the time, she invested US$70,000 in Government of Jamaica (GOJ) bonds and $3.3 million in a fixed-deposit account.
Powell subsequently had a discussion with Smalling about expenses she had to meet concerning her son’s medical condition. Smalling then advised her to invest her money with Cash Plus because “Carlos Hill of Cash Plus had been in business for five years, that he was solid and that she (Smalling) had invested her personal money in Cash Plus”.
Smalling also advised her that she should put the money into Cash Plus for three months because Cash Plus would not go down in three months. Based on the strong advice, Powell encashed the remainder of her funds amounting to US$70,000 and invested the proceeds, amounting to $4,886,000, in Cash Plus but did not get back her money when this investment scheme failed.
Powell had taped the conversation between herself and Smalling and the audio-recording was tendered and played in court.
It was Powell’s contention that the advice she got was negligent and the defendant’s servants or agents ought to have known that the 10 per cent monthly interest that Cash Plus was paying to investors was speculative and a high-risk scheme.
She also contended that they ought to have known that Cash Plus was not licensed by the Financial Services Commission.
RBTT, in its defence, denied that Smalling gave Powell advice as she alleged. It said, further, that if Smalling did give advice it was not in the course of her employment with RBTT.
Morrison found that it was upon the negligent advice that Powell encashed the GOJ bond that was worth US$60,911.28 plus a further US$9,088.72. The judge said “the principle of compensation is that the claimant is to be put into a position that she would have been in had the negligent misstatement not been acted on, is one that is to be applied”.
Powell was awarded US$70,000 with interest at 8.5 per cent from September 20, 2007 to the date of the judgment, which was yesterday.
Hill, the former head of Cash Plus, is currently charged with fraudulently inducing persons to put money in his investment scheme. The case is pending in the Home Circuit Court.