Indexed as:

Carrigan v. Peacock
Between
Alex Carrigan, plaintiff, and
Philip James Peacock, Ian Stanley Anderson, Michael B.
Chalmers, Walter James Moran, 840707 Ontario Inc., carrying on
business as Seniorsplus Newspaper and Marlene M. Peacock,
a.k.a. Marlene Procee, a.k.a. Meta Byle, a.k.a. Marlene Byle
[2001] O.J. No. 223
[2001] O.T.C. 33
102 A.C.W.S. (3d) 831
Court File No. G23466-99
Ontario Superior Court of Justice
Howden J.
Heard: January 8-10, 2001.
Judgment: January 16, 2001.
(29 paras.)
Torts -- Duty of care, particular relationships -- Negligent words -- Extent of liability -- Damages -- Deceit and misrepresentation -- Fraudulent misrepresentation -- Aggravation -- Aggravated damages, claim for -- Exemplary or punitive damages -- Fraud.
Action by Carrigan against Moran and SeniorsPlus Newspapers for damages, including
aggravated and punitive damages, for fraudulent misrepresentation. Carrigan was an elderly man at the time of the alleged fraud. He read an article in the SeniorsPlus newspaper
written by Moran which advertised an investment vehicle to seniors. Moran had been
promised a fee by the other individuals involved in the scheme for promoting the investment scheme to his readers. In a meeting with another individual, Peacock, Carrigan was
promised high yields and a guaranteed return. Carrigan only received two small cash payments of alleged interest on his investment. Peacock and another individual were subsequently charged and convicted of fraud in relation to the scheme.

HELD: Action allowed. Carrigan was entitled to damages against Moran and SeniorsPlus
representing the amount of his investment, plus aggravated damages of $30,000 and punitive damages of $25,000. The representations made by Moran in the article, as well as by
Peacock during his meeting with Carrigan, were patently false. Moran made the false representations with reckless disregard as to their truth. He did not make attempts to verify
that the investments were insured or that they would generate the promised returns.
Statutes, Regulations and Rules Cited:
Securities Act, R.S.O. 1990, c. S.5, s. 29.
Counsel:
P. Thompson, for the plaintiff.
J. Anderson, for Philip and Marlene Peacock.

1 HOWDEN J.:-- The plaintiff claims damages in fraud against all of the defendants or,
in the alternative, against SeniorsPlus Newspaper (840707 Ontario Inc.) and Walter J.
Moran, damages in negligence. He also claims aggravated damages and punitive damages. This action arises out of a scheme to induce persons to invest in a so-called high
yield security called a Guaranteed Insurance Investment Certificate (G.I.I.C.). The defendants Philip Peacock and Ian Anderson were convicted of fraud following pleas of guilty.
The plaintiff and Mr. and Mrs. Peacock have reached a settlement of the issues between
them and minutes of settlement are to be filed. I was advised that the action against Anderson is stayed due to his having been adjudged bankrupt.
2 The action against the defendant Chalmers did not proceed; I am advised that he
could not be served.
3 The defendants Walter J. Moran and SeniorsPlus have been represented by counsel
prior to trial, but Mr. Aloussis was removed as counsel of record with the concurrence of all
parties and himself at the start of the trial. Mr. Moran was present to hear the plaintiff's evidence and cross-examined him. At the start of the second day, Mr. Moran announced that
he was abandoning his defence and would leave. I recessed for fifteen minutes to allow
him and the other parties to consider their positions. Upon the trial re-commencing, Mr.
Moran did not return.
4 As none of the other defendants continued to defend the action at trial (counsel or a
representative attended throughout on the Peacocks' behalf as observers), the plaintiff's
case went in without further cross-examination or answer.
5 I will deal briefly with the evidence, the law and my findings of fact and disposition of
the action.
6 The plaintiff is an elderly gentleman, eighty-eight years of age at the material time in
early 1997. He testified that he had worked hard much of his life in the United Kingdom before moving to Barrie later in life. He had savings of approximately $50,000.00 which he

was interested in re-investing. He testified that he read an article in the SeniorsPlus newspaper edition of February, 1997 and that he saw a letter from Mr. Moran about the G.I.I.C.
SeniorsPlus is a newspaper distributed free of charge geared to the seniors market. It lists
Mr. Moran as its executive publisher. He is the sole shareholder of the company which
publishes it. Mr. Carrigan wrote to SeniorsPlus as the article suggested. Mr. Moran visited
him and encouraged him to act quickly, according to Mr. Carrigan. Mr. Carrigan went to the
SeniorsPlus office some days later and, on March 13, 1997, met Philip Peacock in the
presence of Walter Moran. Mr. Moran's office was very close to that used by Peacock in
early 1997, at 156 Victoria Street, Barrie. After Peacock spoke to him about his money going into "high yield" investments through a company in the Barbados and that they were insured, he gave Philip Peacock a cheque for $10,000.00. In early May, 1997, he gave Peacock a cheque for $40,000.00 after receiving the first "interest" payment in April of
$400.00. Again, Moran was present when he "signed up" for the additional $40,000.00. At
Peacock's request, the two cheques totalling $50,000.00 were made payable to him personally, not the corporate body referred to by Mr. Moran in his pretrial examination as the
company which would operate the "investment program"; according to Moran, the operator
was known to him as Highland Financial Corporation.
7 Mr. Carrigan received other cash "interest" payments of $400.00 and $2,000.00 but no
further return on his investment. Despite the promise of a guaranteed return, Mr. Carrigan
received nothing more until a restitution order was made against Peacock and Anderson
after their pleas of guilty to fraud many months later. No proof of insurance was ever disclosed or found though it was to be sent to investors within two weeks of the investment.
Mr. Carrigan has since suffered two strokes which have impaired his memory somewhat
and weakened him and the loss of his life savings has caused him anxiety and feelings of
self-deprecation.
8 The elements required to prove the tort of fraudulent misrepresentation are explained
in some detail in The Law of Torts in Canada by G.H.L. Fridman (Vol. 2), 1990, pp. 123 to
130. They can be summarized in the following statements:
1)
2)
3)
4)
5)
9

The defendant made a false representation of fact.

The false representation was made with knowledge that it was untrue or
with reckless disregard for its truth or falsity.
It was made with the intent that the plaintiff should act on it.
The plaintiff did act on it as contemplated.
The plaintiff incurred damage as a result.

I will deal now with my findings in the above order, based on the evidence before me.
1.

False Representation

10 The article in the February 1997 edition of SeniorsPlus Newspaper was written by
the defendant Moran. He made this admission to the police and in his examination for discovery. The article states that an investment in a G.I.I.C. is guaranteed and that returns
are guaranteed at four to five times other popular investment vehicles such as G.I.C.'s. It
asks those interested in investing to write SeniorsPlus for information on G.I.I.C.'s. No
other person or corporation is put forward as the responsible entity. The article and the let-

ter are all in the first person and represent to Moran's targeted readers that this is a safe,
guaranteed investment. Moran, in effect, underlined these statements when he met Mr.
Carrigan personally to give him the sales brochure, suggesting that he should get his
money in quickly by meeting Peacock. Mr. Moran heard Peacock make similar representations to Mr. Carrigan in order to obtain his money, with apparent approbation. Those representations were patently false.
2.

Knowledge or Recklessness As To Its Falsity

11 I find that Mr. Moran made the false representations, if not with actual knowledge that
they were untrue, certainly with reckless disregard and willfully blind as to their truth or falsity. According to Mr. Moran's answers on discovery, he attended a meeting in January,
1997 with Philip Peacock, Ian Anderson and two other persons where the investment
scheme was explained. Thereafter, Moran's role was to promote it to his readers. He said
he was also to supply information to the others on how to market it to the seniors population. It was agreed that he would receive 10% of the money that was brought in for endorsing the program, placing ads in SeniorsPlus, and for marketing advice. The goal was to obtain $900,000.00 from investors, though his percentage applied even if the goal was not
reached. The rate of return to "investors" was said to be 20% each six months (which
amounts to a rate of 40% per year). The funds were to be guaranteed by insurance companies. In his statement to the police, Mr. Moran said that the "investment program" was
insured and that he obtained the names of the companies insuring it. He told the police
that after doing some checking, he decided to promote it actively "because my readers
trust who I am."
12 The only "checking" Mr. Moran described to the police was to look up some names of
insurance companies on the Internet and make some calls to establish that they existed as
companies and their "ratings". The one call which he told Detective Carson he made to
check on a principal involved in the scheme in early 1997 prompted outrage from Peacock
and Anderson that he had done so; yet he blithely stated to Det. Carson that this raised
absolutely no suspicion. He expressed no interest in ascertaining the existence or track
record of the supposed investment company, Highland Financial Corporation, or whether
any connection actually existed between it and the defendants Peacock, Anderson and
Chalmers. Nor did he ever try to ascertain whether the companies which he supposedly
checked actually insured the scheme or the "guaranteed" return.
13 Mr. Moran prepared what he referred to in his pretrial examination as an
"advertorial". It was an article promoting the scheme to his readers. Its appearance is that
of a feature newspaper article with a coloured headline, placed prominently on the back
page with a coloured border around it. It is almost identical to his personal letter sent in
February, 1997 to persons on the SeniorsPlus mailing list. The article was placed in the
February, 1997 edition. It was read by the plaintiff. Briefly, Mr. Moran's article is written totally in the first person singular. It begins by raising the frightening spectre, for senior citizens living on limited and fixed incomes, of the erosion of their incomes by diminishing interest rates, changes to taxation and doubts about government programs. Mr. Moran then
went on to write, in part:
What, I've heard from many mature investors, can we do? It's a question I've

given a great deal of thought to, and I believe that I may have found an
answer for you.
I have recently come across an alternative - one that for some of you will provide a solution to the investment dilemma we've just discussed. This alternative is an investment in which the investment and its return are
backed by an insurance policy issued by a major insurance company. In
other words, your investment - and your profits on that investment - are
guaranteed. It's called a Guaranteed Insurance Investment Certificate.
Even more exciting however, are the returns available with a G.I.I.C. You can
learn how to guarantee - that's right - guarantee - a return that will be four
to five times or more what you would receive on most of today's common
investment products such as G.I.C.'s, treasury bills, bank deposits, savings bonds and so on. This is possible because of the structure of a
G.I.I.C., and because a G.I.I.C. involves the pooling of money with other
smaller investors like yourself. Essentially, the money you invest is actively reinvested in order to generate better than average returns for you.
....
I've taken the time to investigate Guaranteed Insurance Investment Certificates, and I think that this information merits your giving them some consideration, particularly if you are as disgusted as I with the low rates your
investments are now making, or if you want to learn how to guarantee the
safety of your money while earning a very good return at the same time.
G.I.I.C.'s are not a program for all of us - just as not all of us invest in mutual
funds, or G.I.C.'s or Canada Savings Bonds - or keep our money stuffed
in our pillows. However, if you want your money to earn a far better return, and to do it in perfect safety, than (sic) you should take the time to
inform yourself about this program.
....
If you wish to learn more about G.I.I.C.'s and their vastly superior returns, and
your guarantee, please drop me a line in care of this newspaper. Just address it to G.I.I.C. Investments, c/o SeniorsPlus Newspaper, Box 1112,
Barrie, Ontario and let me know that you wish to receive information on
G.I.I.C.'s.
14

That concludes Mr. Moran's "advertorial".

15 Below it, in small print, is a disclaimer that this does not offer to the public the sale of
any investment, but is an informational summary only. No doubt this was an attempt to
meet the problem of Section 29 of the Ontario Securities Act, R.S.O. 1990, ch. S.5 which
requires anyone trading or advising on securities to be registered under that Act. The only
evidence before me on that point is that neither Moran nor Peacock was so registered.

16 Mr. Carrigan wrote to SeniorsPlus of his interest on February 26, 1997 (Exhibit #2, p.
108). That letter stated that he had $48,000.00 available for re-investing. It was the defendant Walter Moran who visited him on March 3, 1997. Mr. Carrigan's memory has obviously been affected by the strokes he has suffered since, but he recognized the SeniorsPlus member card he signed and a brochure (Exhibit #11) advertising the same scheme
as guaranteed, which he received from Mr. Moran. Mr. Moran told Det. Carson later that
he had prepared Exhibit #11. The plaintiff also signed a typed form regarding interest in
the program which shows the date as March 3rd, 1997. Another victim of this scheme, Patricia Powell, confirmed this pattern and the role of Moran. She had no difficulty in recalling
that when she responded to another G.I.I.C. ad in SeniorsPlus, it was Mr. Moran who
came to her house, advised her how much she should invest, signed her on as a member,
and left the brochure. He acted throughout as the contact person whenever she called, as
Mr. Carrigan also recalled, attempting explanations when "returns" on their money ceased.
17 Mr. Carrigan attended the SeniorsPlus office and it was Mr. Moran who introduced
him to Peacock and sat through their conversation. Mr. Moran was present on the two occasions when Mr. Carrigan gave Peacock cheques, one for $10,000.00 and the other for
$40,000.00. The cheques were made payable to Peacock personally, not Highland Financial Corporation. As with Mrs. Powell, it was Mr. Moran who always spoke to them when
they called for information. And despite Mr. Moran's attempting to cross-examine the elderly and ailing plaintiff on whether he could identify the signature witnessing payment of
the second $400.00 cash "interest" payment, Moran had earlier admitted that it was his
signature (Examination for Discovery, Q. 133; Exhibit #2, p. 10).
18 Det. Carson identified a document under the heading Seniors Investment Services,
bearing the same address as SeniorsPlus Newspaper and the office of Walter Moran, 156
Victoria Street. It summarized the procedure which "investors" were to follow. One requirement was that the person commit to "non-disclosure" and to enter a "confidentiality" agreement in order to maintain the secrecy of the scheme (Exhibit #2A, p. 180-1 and p. 157).
Mr. Moran told Det. Carson "this deal was supposed to be confidential".
19 Mr. Carrigan stated in his evidence his faith and trust in SeniorsPlus as a newspaper
which looks out for seniors. In the examination for discovery and statement to the police,
Mr. Moran showed his keen awareness of that trust. He maintained to the police that he
had no suspicions in early 1997 despite the secrecy demanded of "investors", the cheques
payable to Peacock personally, the fury of Peacock and Anderson when he said he tried to
check on Chalmers and that he (Moran) did not understand the scheme until he heard
Peacock outline it to Mr. Carrigan (weeks after he had written his personal and corporate
endorsement of the scheme and its guaranteed status). These statements defy belief.
20 I find that Mr. Moran participated in the scheme in order to obtain money from senior
citizens based on the trust he and his newspaper had enjoyed as a publication supposedly
addressing their needs. Through his newspaper and personally, he invited the plaintiff and
others to give money to Philip Peacock personally under the guise of a guaranteed, high
yield investment. He made no effort to check whether it was guaranteed and he had a personal interest in raising the money as his fee was 10% of what was brought in. Both his
personal interest and the details of the scheme were to be secret. He professes to have a
degree in economics and to be a sophisticated marketing person; yet mathematically the

plan made no sense. At the very least, Mr. Moran acted with reckless disregard for the
truth and was willfully blind in early 1997 to the deceit involved in this scheme.
3.

Intent

21 I find that Mr. Moran clearly intended Mr. Carrigan to act on his and Peacock's representations by paying his money to Peacock. Mr. Carrigan did not remember many details,
but he remembered that Mr. Moran was the first person to see him after he had written in
answer to the ad. According to Mr. Carrigan, Mr. Moran told him that the quicker he paid
in, the quicker you'll get interest. He was clear on that evidence and I accept it. The evidence of Mrs. Powell confirmed Mr. Moran's introductory selling role. He wrote the promotional article targeting his seniors readers. He had a personal stake in getting money in,
and he was also present during Peacock's explanations and direct request for a cheque
payable to Peacock.
4.

Plaintiff Acted On It As Contemplated

22 There is no doubt that Mr. Carrigan acted on Moran's and Peacock's representations
of the investment being safe and guaranteed with a high return, and on Moran's continuing
association with this scheme as the contact person for it with SeniorsPlus readers. As Mr.
Carrigan said sadly, "I trusted these people." That definitely included Moran.
5.

Plaintiff Incurred Damages

23 There is also no doubt that Mr. Carrigan has suffered loss as a result. He paid
$50,000.00 to Peacock and received only three so-called "interest" payments totalling
$2,800.00. Then he received nothing more until some time after the court's restitution order was made. Det. Carson testified that according to his investigation, all of the moneys
paid in by the plaintiff and the other "investors" went to Peacock, Anderson, and Chalmers
personally, and to SeniorsPlus Newspaper, the sole shareholder and controlling mind being Walter Moran. $4,000.00 was paid out by Peacock in two cheques to SeniorsPlus
Newspaper (Exhibit #2B, pp. 425-6). Det. Carson said Moran gave him this information
himself (Exhibit #2A, p. 176) but he described it as payment for the three "ads" in February, May and June, 1997 and for his "endorsement". Det. Carson also stated that according to his investigation, no insurance ever existed. He did find a record of a company
called Highland Financial Corporation. It was based in Barbados and its principals were
three doctors from the United States. There was no connection between that company and
Peacock, Anderson, Chalmers or Moran. And that company had never offered investments
in Canada.
24 In view of these findings, the defendants Walter J. Moran and SeniorsPlus Newspaper are liable, among others, in damages to the plaintiff in fraud. This is not simply a case
of a newspaper merely taking an advertisement and being careless about the facts. In this
case, Moran actively participated in the fraudulent scheme in using his and his publication's position of trust with elderly readers by falsely representing the scheme, meeting the
prospects, encouraging them to pay into the scheme, acting as the continuing contact person thereafter, being present for the pitch to obtain the money, seeking to personally and
corporately profit from it, and later trying to cover by denying to the plaintiff's son and

daughter-in-law that he ever knew much about it at all. Det. Carson stated that the only
reason that Mr. Moran was not charged with fraud in addition to Peacock and Anderson
was that the prosecution needed a witness with knowledge of the whole scheme and that
was Moran. Det. Carson had recommended to the prosecutor that he be charged.
25 I find that Mr. Carrigan paid $50,000.00 as a result of the Peacocks' and Moran's actions. He has received a total of $16,700.00 including sums received under the restitution
order. The plaintiff is entitled to judgment against the defendants Moran and 840707 Ontario Inc. carrying on business as SeniorsPlus Newspaper for $33,300.00 in damages for
fraud.
26 In addition, I find that the plaintiff's medical condition has worsened from a very
healthy, alert and active man of close to ninety years of age to a weakened, more anxious
and self-critical person who has suffered two strokes and who is dependant on daily medication. Of course, some part of this deterioration may have occurred in any event, given
Mr. Carrigan's age. However, his daughter-in-law's evidence, as well as that of the plaintiff
himself and his son, made clear that a substantial contributor was the loss of his savings
as a result of the fraudulent conduct of Moran and the others. Mrs. Carrigan Jr. described
being with Mr. Carrigan at the time of his second stroke. She said that Mr. Carrigan managed to say, with difficulty, his mouth partially paralyzed, "make sure you get my money".
27 Aggravated damages represent additional damages required to compensate a plaintiff who has not merely suffered financial loss, but whose physical and/or emotional health
has suffered as a result of the high-handed or oppressive conduct of the defendants. In
this case, aggravated damages are warranted due to the emotional and physical problems
and changes caused significantly by Moran's conduct in making false promises in order to
obtain savings from trusting elderly people. I assess this category of damages at
$30,000.00.
28 Finally, I assess punitive damages in the sum of $25,000.00. In my view, this award
is required, in addition to the compensatory awards above, to register the court's strong
disapproval of the defendants' fraudulent conduct and to punish them. Neither Moran nor
SeniorsPlus were subject to the stigma of a criminal charge, unlike Peacock and Anderson. As well, Mr. Moran knowingly abused the trust reposed in him and his newspaper by
those who responded to his entreaties in hopes of personal gain. He helped to prey on a
vulnerable segment of our society. Before this court, he professed concern for Mr. Carrigan and yet questioned him for most of an afternoon concerning matters which were not
seriously in dispute.
29 The defendants Moran and SeniorsPlus Newspaper will also pay the plaintiff prejudgment interest in accordance with the Courts of Justice Act and costs on a solicitor and
client scale.
HOWDEN J.
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