Caregiver Found Liable

CaregiverA caregiver was found liable in the amount of $136,000 in favour of a handicapped patient who could not manage money, as the caregiver breached her fiduciary duty owed to the plaintiff, and was unjustly enriched. see  Reeves v Dean 2012 BCSC 1425.

The care giver was paid by the provincial government and was found to have misappropriated $136,000 from a joint bank account to which the plaintiff had contributed  all of the funds

 

The plaintiff, through her litigation guardian claimed relief on two grounds;

(1) there was a fiduciary relationship between her and Ms. Dean that was violated when monies were withdrawn from the joint accounts and appropriated by Ms. Dean and Ms. Blackwell; and

(2) Ms. Dean and Ms. Blackwell were unjustly enriched by the appropriation to their own use of $136,000 of Ms. Reeves’ money from the joint accounts.

 

The plaintiff won judgement 0n both grounds against the caregiver.

22      Turning to the first question, I find there was a fiduciary relationship between Ms. Dean and Ms. Reeves in regard to the administration of the monies in the joint accounts. Ms. Dean was accorded full access to Ms. Reeves’ monies in the joint accounts for the express purpose of assisting her to manage her finances. Ms. Dean took on this responsibility in her capacity as Ms. Reeves’ caregiver pursuant to a contract for services with the Ministry. Ms. Reeves was a vulnerable, mentally challenged young woman who, to Ms. Dean’s knowledge, was incapable of handling money and managing the joint accounts. Ms. Dean took charge of the bank card and in this regard had sole control of and access to the funds in the joint accounts. Ms. Dean decided how much money to give Ms. Reeves for personal expenditures and otherwise made all decisions regarding the funds in the joint accounts.
23      As articulated by the Supreme Court of Canada in International Corona Resources Ltd. v. LAC Minerals Ltd., [1989] 2 S.C.R. 574 (S.C.C.) at para. 130, the three general characteristics of a fiduciary relationship are:
(1) The fiduciary has scope for the exercise of some discretion or power.
(2) The fiduciary can unilaterally exercise that power or discretion so as to affect the beneficiary’s legal or practical interests.
(3) The beneficiary is peculiarly vulnerable to or at the mercy of the fiduciary holding the discretion or power.
24      It is the vulnerability of the beneficiary that is essential to a finding of a fiduciary relationship or obligation. This position of disadvantage or vulnerability causes the beneficiary to place reliance on the fiduciary and equity imposes corresponding duties on the fiduciary to act properly in accordance with the interests of the beneficiary.
25      On the facts of this case, there can be no doubt that Ms. Reeves was in a position of disadvantage regarding the administration of the joint account monies. As a mentally challenged adult, she, by necessity, placed her trust in Ms. Dean and depended upon her to properly manage the monies in the joint account. Ms. Reeves was particularly lacking in skills related to the management of her money and, indeed, it was the recognition of this frailty by Ms. Dean that led to the arrangement regarding the joint accounts. It is also clear that Ms. Dean had an unrestricted discretionary authority over the money in the joint accounts that was not supervised in any manner by the Ministry or Ms. Reeves’ family. Lastly, Ms. Dean was able to exercise her authority over the joint accounts to the financial prejudice of Ms. Reeves.
26      I am also satisfied that Ms. Dean violated the duties imposed upon her as a fiduciary regarding the management of Ms. Reeves’ monies. From 1997 to 2007, Ms. Dean essentially stole $136,000 from Ms. Reeves. Ms. Dean systematically emptied the joint accounts of funds each month by transferring the money to her accounts, or to accounts held jointly with Ms. Blackwell, by withdrawing funds in cash, and by paying for her own goods and services directly from the joint accounts. I reject Ms. Dean’s evidence that the Ministry authorized her to remove monies from the joint accounts for her own purposes. There is no evidence to support her assertion that the Ministry approved of the appropriation of monies from Ms. Reeves. Further, the Ministry had no authority over Ms. Reeves’ monies and thus could not have authorized Ms. Dean to appropriate these funds. While the Ministry may have been lawfully entitled to claim monies from Ms. Reeves directly as a contribution towards the cost of her care, it could not do so indirectly by authorizing Ms. Dean to seize the funds and use them for her own purposes, particularly without any accounting as to what was taken.
27      The remedies available for breach of fiduciary duty include constructive trust, accounting of profits and equitable compensation to restore to the plaintiff what was lost due to the breach of duty: Frame v. Smith, [1987] 2 S.C.R. 99 (S.C.C.) at para. 61. In this case Ms. Reeves seeks judgment for the amount taken by Ms. Dean in breach of her fiduciary duties. Although there was a delay in bringing this action, I find there can be no finding of laches. Ms. Dean’s misappropriation of funds took place from 1997 until 2007 without the knowledge of Ms. Reeves’ family. Ms. Reeves was not mentally able to understand or challenge Ms. Dean in regard to her handling of the monies. Soon after Ms. Reeves left Ms. Dean’s home this action was commenced. Thus I find there is no basis upon which to deny relief to Ms. Reeves.
28      While the remedies for breach of fiduciary duty are not affected by the good faith of the fiduciary, it is important to add that Ms. Dean was a well educated and experienced social worker who was very familiar with the obligations placed upon her as Ms. Reeves’ caregiver. I have no doubt that she was fully cognizant of the wrongful nature of her actions and the breach of trust that she was committing while Ms. Reeves was in her care. While Ms. Dean may have regarded the monies taken as a well earned bonus for services rendered, what occurred here was a blatant theft of Ms. Reeves’ monies for a period of over ten years.
29      Turning to the second question, I am satisfied that Ms. Dean and Ms. Blackwell were unjustly enriched by the appropriation of $136,000 from Ms. Reeves. All of the essential elements of unjust enrichment are present in this case. First, Ms. Dean and Ms. Blackwell received a benefit in the form of monies belonging to Ms. Reeves. Second, Ms. Reeves suffered a corresponding detriment by the loss of her monies. Third, there was no juristic reason for the enrichment. Ms. Dean acknowledged that the Ministry paid the entire fee for Ms. Reeves’ care pursuant to the proprietary care contract and, further, she performed no additional services for Ms. Reeves in consideration of the monies taken from the joint accounts. There was no contract, no disposition of law or donative intent to justify the benefit. The benefit was not conferred by any valid common law, equitable or statutory obligation. The defendants have not established any public policy reason to retain the benefit or any legitimate expectations as between them and Ms. Reeves that would justify the benefit. As described above, this is a simple case of theft.

Trevor Todd

Trevor Todd is one of the province’s most esteemed estate litigation lawyers. He has spent more than 40 years helping the disinherited contest wills and transfers – and win. From his Kerrisdale office, which looks more like an eclectic art gallery than a lawyer’s office, Trevor empowers claimants and restores dignity to families across BC. He is a mentor to young entrepreneurs and an art buff who supports starving artists the world over. He has an eye for talent and a heart for giving back.

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