property division - Common Law couples
Common law couples are not entitled to equalize their property like married couples under the Family Law Act. In practice, this means that common law couples operate under a “what’s mine is mine; what’s yours is yours” regime. Nonetheless, common law spouses may still have property rights against their ex-partner in certain situations. There is a large and complicated body of case law dealing with “equitable claims” that common law couples could rely on, specifically the claim of “unjust enrichment”.
Unjust Enrichment
This legal doctrine is conceptually simple: one person should not be allowed to benefit at the expense of the other. If so, the person who was deprived of a benefit should be compensated. There is a three-part test to determine whether unjust enrichment is at play:
Enrichment: one person must have received a tangible benefit from their spouse that enriched them.
Corresponding deprivation: the person making the claim must show that they have been deprived of a benefit by having provided something to their spouse.
Absence of a juristic reason for the enrichment: the person making the claim must show that there is no legal reason for their spouse to maintain the benefit that was given to them (like a contract, or the fact that the benefit was gifted to them and never intended to be repaid).
Once an unjust enrichment has been established, the appropriate remedy must be determined. The first remedy to consider is always a monetary one: a spouse must simply repay the other. However, the way the unjust enrichment came about will influence the amount of money to be repaid.
For example, one spouse may have contributed to the purchase of a home, but her name was never placed on title. In this case, it could be simple to quantify the amount of money the non-titled spouse contributed to the home, which could be returned to her as a remedy for the unjust enrichment. Other situations are more complicated, which could bring the couple into the territory of a “joint family venture”.
Joint Family Venture
Many couples live together as married couples in all but name, jointly contribute to the accumulation of their wealth, and one partner leaves the relationship with a disproportionate amount of that wealth. The doctrine of a joint family venture is generally useful to remedy situations where there is a web of joint efforts that resulted in the accumulation of wealth throughout a couple’s relationship. This stands in place of trying to itemize and value every contribution the spouses may have made, either financially or intangibly (by taking care of housework so the other spouse could work, for example).
Determining whether spouses were engaged in a joint family venture is complicated and highly fact-driven. The factors that indicate whether a joint family venture exists focus around four pillars: (1) the mutual effort of the spouses; (2) the degree of economic integration; (3) their actual intent during the relationship; and (4) the prioritization of the family unit in decision-making. Each factor then has its own sub-analysis that has been developed in case law.
When a joint family venture is established, the spouses are entitled to share their family’s wealth in proportion to their contributions. There is no presumption of an equal share as is the case for married couples. For example, a court might find that one spouse is entitled to 20% of the family’s wealth on account of their contributions throughout the relationship.
Other Remedies
In rare situations where a monetary remedy is insufficient, a court could impose a “proprietary remedy” by way of a “constructive trust” or “resulting trust”. This has the effect of changing both spouses’ rights to the property in question. Once established, the titled spouse will no longer be the sole owner; rather, they will be deemed to hold the property (or a portion of that property) in trust for their spouse.
Conclusion
More and more couples are living as married couples in all but name. Unfortunately, our legislation has yet to reflect this reality, unlike other provinces in Canada. Until then, common law couples will need to rely on complicated case law (that frankly many lawyers and judges struggle to fully grasp) to receive fair treatment relating to property rights.
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