The Supreme Court of British Columbia has upheld the breach of trust claim of a woman who handed $700,000 to a mortgage broker, who subsequently lost the money through stock market trades.

Farah Carrington placed the money with mortgage broker Saeed Mansourian. Carrington handed the money to Mansourian after he told her that he could invest her money at a greater rate of return than the 4% then being paid by the Bank of Nova Scotia, on a GIC.

In early April 2000, Mansourian introduced Carrington a company now known as Next Century Capital Corp. He told her that this was a reputable company; that she could invest the money in that company in a security equal to that of the Bank of Nova Scotia; that he had his own money in it; and that it was so safe that nothing could go wrong unless the Canadian government went out of business. He told her she would receive a 7% rate of return, with interest paid monthly.

Carrington contended she was induced to place the money with Mansourian in reliance upon his deceit. Mansourian denied any deceit, and said that, at the request of Carrington, he agreed to assist her in achieving a higher rate of return on her funds.

The court found that Mansourian’s denials, “carry no weight because he was not a credible witness.”

The court found that after receiving the money, Mansourian placed it in an investment account he carried with Thomson Kernaghan. In June 2000, Mansourian withdrew the funds from Thomson Kernaghan and opened an account, in his name, with Merrill Lynch. Between May and November 2000, Mansourian sent monthly cheques to Carrington. When a cheque was not received for December 2000, Carrington contacted Mansourian, and he admitted that the entire fund had been lost; that he had gone behind her back and used her funds to trade in shares.

The court found that Carrington proved her claim against Mansourian of knowingly making a false statement, with an intent to deceive, and that she suffered damage as a result.

The court ruled that Carrington is entitled to be placed in the same position she would have been but for Mansourian’s deceit. Since she was content to leave the money in the GIC, the final monetary judgement will be based on the interest rate prevailing from April 2000 to date.

http://www.courts.gov.bc.ca/Jdb-txt/SC/04/03/2004BCSC0340.htm