Sat | Dec 10, 2016

Bank wins in Cash Plus appeal

Published:Sunday | February 1, 2015 | 12:00 AM

Court rules against woman who claimed RBTT employee caused her to lose almost $5m in failed scheme

Barbara Gayle, Justice Coordinator

A local financial institution scored a major victory last week when the Court of Appeal overturned a Supreme Court order for it to pay US$70,000 with interest to one of its customers who claimed she was given bad advice by one of its employees to invest in the failed investment scheme, Cash Plus Ltd.

RBTT Securities Jamaica Ltd had appealed the ruling and the Court of Appeal held that it was of the firm opinion that the Supreme Court erred in concluding that the appellant had breached its contract with Yvonne Powell.

The court, after hearing legal arguments from Sandra Minott-Phillips, QC, and attorney-at-law Alexis Robinson ruled that Supreme Court judge, Mr Justice Bertram Morrison, did not give sufficient thought to the fact that Powell was aware of the various public notices and warnings against investing in Cash Plus and similar schemes.

President of the Court of Appeal, Justice Seymour Panton, Justice Mahadev Dukharan and Justice Patrick Brooks, in allowing the appeal, held that Powell was a customer of Cash Plus prior to conversations she had with the employee of the bank.

The court said that Morrison absolved her of all the responsibility for the predicament she placed herself in with her eyes wide open to the dangers.

The court pointed out that Powell said she invested in Cash Plus because of the high interest rate of 10 per cent monthly on investment. Powell was ordered to pay the appellant's legal costs.

Powell, who was represented by Lord Anthony Gifford, QC, and attorney-at-law Emily Crooks had filed a suit in 2008 in which she contended that following a discussion she 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 bonds and $3.3 million in a fixed-deposit account.

She subsequently had a discussion with Smalling about expenses she had to meet concerning her son's medical condition and Smalling 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 had invested her personal money in Cash Plus".

Smalling, she said, also advised her that she should put the money into Cash Plus for three months because it would not go down in three months. Based on the advice, Powell said she 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.

She filed a negligence suit contending that the RBTT's agent gave her advice and ought to have known that the 10 per cent monthly interest that Cash Plus was paying to investors was a speculative high-risk scheme.

She said the financial institution 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.