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The Court of Appeal upheld a civil fraud judgment and punitive damages against an appellant who misappropriated a vulnerable widow's funds.
The appellant appealed from a trial judgment awarding the respondent US$192,000 in compensatory damages plus pre-judgment interest, $25,000 in punitive damages, and $85,000 in costs in a civil fraud case.
The trial judge found that the appellant fraudulently obtained US$200,000 from the respondent, a vulnerable widow, by misrepresenting that the funds would not be traded and then investing them in call options through his personal accounts, resulting in total loss.
The Court of Appeal dismissed the appeal, finding the trial judge's reasons were sufficient, the credibility findings were supported by the record, and the punitive damages award was appropriate given the appellant's highly reprehensible conduct.
The court found the defendant liable for civil fraud after he recklessly traded and lost a vulnerable widow's life insurance proceeds.
The plaintiff, a vulnerable widow with limited financial knowledge, sued the defendant for civil fraud after losing $250,000 USD of her life insurance proceeds in speculative options trading through the defendant's account.
The defendant, a computer-literate individual with investment knowledge, had promised the plaintiff's dying husband he would look after her and her children.
The court found the defendant committed civil fraud by taking advantage of the plaintiff's vulnerability and making reckless trades, despite his claims that the plaintiff directed the trades.
The court awarded compensatory damages of $192,000 USD and punitive damages of $25,000 CAD.
