Legal Question in Credit and Debt Law in Canada
Investment turned sour
2 years ago a group of about 20 people were convinced to gather our money and invest it in a house so that we could fix it up and resell it at a profit. The organizer took all our money and sent out a picture of the house we were buying. We were never told it was not bought and the 20 of us lost contact with each other. (Our meetings / group had internal issues.) Nevertheless the organizer has had our money for 2 years. We have slowly regained contacts of each other and I want to know if we can legally ask for our money back + interest + inflation (the opportunity cost of giving him our money). He lied to us about investing the money and for 2 years he could have done anything with it. He would not return our calls and was just distant. (Still wont call me back). Legally can we ask for our money back + interest + inflation? or can we only ask for our money back in the principal amount? Can we ask for more than just money and interest? (By interest i use the average prime rate given by bank of canada in past 2 years). Because he did not invest our money which was the agreement...he effectively got a loan. What can be done about the fact that he did not invest our money? and if considered a loan can we get principle and interest?
1 Answer from Attorneys
Re: Investment turned sour
The answer to your question will depend on the terms of your original contract for the investment - either (1) you lent the money in which case your agreement would be a loan agreement with specified interest; or (2) you became an equity partner with the other 20 people, in which case, you would have gone on title for a proportionate share of ownership in the house.
Of course you can ask for your money back and I highly recommend that you make this demand immediately.
I cannot tell you that you are entitled to interest unless your agreement provided that you would get interest.
In fact, you would likely be doing well if get your principal investment back with at this stage.
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