This blog post is part of six-part series with Professor Albert Oosterhoff examining the application of equitable remedies in instances of elder abuse. The subject of this post is Danilova v. Nikityuk a troubling case that highlights the vulnerable position of older adults who are new to Canada and/or speak limited English. The Superior Court applied the doctrine of constructive trust as a remedy to the elder abuse suffered in this case.
Mr. Danilov and Ms. Danilova (the “Danilovs”) – surprisingly the plaintiffs in this matter – enticed Ms. Danilova’s mother and step-father (the “Nikityuks”) to retire to Canada by presenting them with a document suggesting that their assets would be sufficient to provide them with a house and a comfortable retirement. The Nikityuks thus liquidated their Russian assets, forwarded their life savings to the Danilovs, and made the journey to Canada.
The Nikityuks were retired, did not speak English, and were heavily reliant on the Danilovs to become established in Canada. However, shortly after receiving the Nikityuk’s funds, totalling several hundred thousand dollars, Mr. Danilov lost most of the money on the stock market. He had failed to ask the Nikityuks if he could use their funds to invest, and additionally, failed to notify them when the bulk of their savings was lost.
The Danilovs also purchased a house with the Nikityuk’s funds, which they subsequently moved into with the Nikityuks when the younger couple’s financial situation became dire. Therefore, in short order, the Nikityuk’s went from expecting a comfortable retirement with a place of their own, to living with the Danilovs, who began to exert complete control over the older couple’s financial matters. When the relationship eventually broke down, the Nikityuks moved into social housing with the assistance of an advisor at the local YMCA.
Subsequently, the Danilovs brought an action for, inter alia, breach of contract, negligence, and conspiracy, in which the YMCA was also named as a defendant. The Nikityuks brought a counterclaim for fraud, misrepresentation, unjust enrichment, breach of contract, and breach of fiduciary duty. The Danilov’s claim was dismissed, and Mulligan J. ordered that the Danilovs pay the Nikityuks $277,318 for the constructive trust claim, which included the funds for the house the Nikityuks were forced to move out of, as well as punitive damages totaling $25,000, and pre-judgment interest.
McLachlin, J., as she then was, described constructive trust as follows:
constructive trust is an ancient and eclectic institution imposed by law not only to remedy unjust enrichment, but to hold persons in different situations to high standards of trust and probity and prevent them from retaining property which in “good conscience” they should not be permitted to retain.
In this case, it clearly would not have been in “good conscience” for the Nikityuks to bear the losses suffered as a result of the Danilovs’ actions. The Court thus granted the Nikityuks an equitable remedy tied in quantum to the funds they advanced to the Danilovs, and which they expected would be used to provide for a comfortable retirement close to family. Therefore, the flexibility of the law of equity allowed the Nikityuks to recuperate some of their losses through the remedy of constructive trust, though likely did not completely restore the older couple to their former financial position. It goes without saying that no financial remedy could adequately compensate the Nikityuks for the emotional turmoil and relationship breakdown that they suffered as a result of the Danilovs’ actions.