Common-Law Relationships in Ontario:  The Essentials

Under Canadian Family law, there are two categories of romantic relationships that are recognized:  1) Formal marriages, and 2) Common-law unions.  

With common-law relationships in particular, there is often a misconception that the two partners – being unmarried – must simply “walk away” from each other, with no string attached.  But this is not quite true. 

In fact, common-law relationships give rise to a distinct set of rights and obligations, and these come to the forefront if the union happens to end.   This brief article will cover some of those aspects.

What is a Common-Law Relationship?

Simply put, a common-law relationship is one that does not involve any sort of marriage ceremony.  As long as you and your partner have been living together – or “cohabiting” – for the prescribed period of time, your common-law relationship will be recognized in law.

What’s the Test?

Ontario Family law sets up a strict test for what is considered a common-law relationship.  That’s because certain legal rights are triggered once your relationship meets that criterion. 

To qualify, you and your partner must simply have lived together continuously as a couple:

• For at least three years, 

or else

• For any length of time as long as you are in “a relationship of some permanence” and have a child together. 

As long as that threshold has been met, the character and intricacies of your relationship does not matter.  Some unmarried couples may choose to organize their relationship as an economic partnership; others simply decide to live out their lives together in a manner that is very similar to a marriage but without the formal ceremony.  Either way, the law protects common-law spouses from being unfairly disadvantaged in the event their relationship ends. 

Also, in some circumstances a court may conclude that you and your partner were common-law spouses even though you were not living under the same roof.

Note that the test for common-law status under Ontario Family law is different from the test applied to other areas of the law.  For example, under the Canadian federal Income Tax Act it’s much shorter:  That Act defines a “common law partnership” as one where the taxpayer resided with his or her partner for at least a year.

Related: Marriage vs. Common Law in Ontario

Rights and Duties If Your Relationship Ends

Once you and your common-law partner have met the requisite legal definition, you are considered to be “spouses” under Ontario law.  If you decide to end your common-law relationship and stop living together, there are certain obligations that arise.  At that point you essentially become former unmarried partners, and each of you has certain rights arising from that.  They include:  

• The potential right to financial support; and
• Property rights. 

1. Financial Support

First, there is the potential for financial support.  As former common-law partners, one of you might able to claim monetary support from the other, once your relationship is over.  It will depend on the facts.  But in the right circumstances, it’s a right that arises under specific provisions of the provincial Family Law Act. 

It’s worth emphasizing that the entitlement is not automatic; the court must take into account a host of factors around the manner in which you and your partner organized your relationship, together with your respective needs and circumstances.   

For example, if during the span of your relationship you and your partner decided to keep your finances separate, and to be economically independent of each other, then it is unlikely a court will order that one of you must pay support to the other. 

2. Property Rights in Your Shared Assets   

Next, there are your rights to the property you share.  This covers the assets you acquired together during your relationship.  Ideally, you and your common-law partner have entered into a legal cohabitation agreement, that covers how you will deal with your property if you separate.  This kind of contract must comply with certain Family Law Act requirements around formality and the witnessing of signatures.

However, many couples do not enter into a cohabitation agreement in advance.  This is where the outcome gets a bit murkier.  Because as compared to a formal marriage – where equal division is governed by various provincial and federal legislation such as the Ontario Family Law Act – the task of dividing up your property on separation is a little more complicated.

For one thing, it’s not dictated by how long you have been living together.  Nor is it necessarily on-par with the rights of married spouses.  Rather, it is tied to the nature of your relationship, and the mutual investment you each made, while cohabiting.  This in turn calls on certain legal tests that the courts will apply to your unique situation, to arrive at a fair result.

Also, if you and your partner did not make contractual arrangements respecting your property at the outset of your relationship, then the law can step in to redress any inequities that arise when the relationship ends. This is covered by the law of “constructive trust,” and it looks at your respective contributions (both monetary and otherwise), and how they impacted your assets.  If only one of you holds title to an asset, but it can be shown that the other spouse made significant contributions to its acquisition, then the court can make an order that balances out that unfairness.  

The classic case to illustrate this is called Pettkus v. Becker, where the Supreme Court of Canada decided that a woman who was living in a common-law relationship for 20 years with a man was legally entitled to some of the value of the successful beekeeping business and other assets that were in the man’s name alone.  The Court found that the woman had contributed significantly to his accumulation of wealth over the years, by toiling at the business and providing domestic support – all for no pay.  To allow her to leave the relationship with nothing to show for all the hard work would allow the man to be unjustly enriched at the woman’s expense of the woman.

Related:I Am in a Common Law Relationship: What Are My Property Rights?

The Concept of the “Joint Family Venture”

Ontario courts also have other tools in their arsenal, to redress any imbalances between former common-law partners who decide to split.  Another remedy is for the court to assess whether you and your former common-law partner have what is called a “Joint Family Venture” together.

1. What Is It?

The essence of this concept is simply that you and your partner have each contributed or worked together towards a broader family goal, while you were living together.

Typically, this involves your having established a successful business, which was only made possible because one of you took on the childcare or household duties, which allowed the other partner to work long hours.  If a court finds a Joint Family Venture was in place, it may order one of you to compensate the other, for his or her share in that business.  Alternatively, the court may simply make an order that the business assets should be divided up in a fair manner.

2. How Do You Prove There Was a Joint Family Venture?

In a Supreme Court of Canada decision called Kerr v. Baranow, the Court set out the following prerequisites for finding that a Joint Family Venture existed between former common-law couples:

• Mutual effort.   This looks at whether you and your former partner expended mutual efforts towards your common goals, and whether you worked collaboratively.  It also examines whether you and your partner viewed your relationship as being equivalent to married. 

• Intertwined economic interest. Were your economic interests intertwined with your partner, or did you behave in an economically-independent manner?  Did you pool your resources? Did you make joint investments? 

• Intent. Did you both intend to participate in a joint family venture?  Did you identify yourselves as common-law partners, for example on your income tax returns? 

• Prioritization.  To what extent was family a priority to each of you, in your decision-making? Did you both make joint decisions – such as changing jobs or moving – for the sake of the family? 

3. Unjust Enrichment

These tests above are the cornerstone to a court’s finding that you and your former common-law partner had a joint family venture.  However, it’s not the only test.  

Rather, the court will also look at the overall balance of cost/benefit to each of you, now that your relationship is over.  In particular, if you are the one making the claim against your former partner, then you must also convince the court that your partner is enjoying an “unjust enrichment”, and that you are suffering a corresponding detriment.

To succeed in your claim, you must prove all of the following:   

• You and your partner were in a Joint Family Venture in connection with the business, 

• Your contribution to that venture enriched your partner, 

• Your contribution gave rise to you suffering a corresponding deprivation, 

• There is no legal reason to enrich your partner (e.g. there is no contract, inheritance or gift that gave rise to the enrichment), and 

• Without a court order, your partner would otherwise keep a disproportionate share of the joint family venture’s profits. 

4. What Happens Then?

Only once all of those elements have been proven, will a court decide whether (and how much of) a damages award should be granted to you.  It might involve putting a dollar-value on your Joint Family Venture, or it might see you get compensated on a fee-for-service basis, after looking at the value of what you contributed over the years. 

The Takeaway

As this article illustrates, the law on what happens when your common-law relationship ends can be quite complex. If you find yourself wondering about what your obligations or entitlements might be, it’s important to get accurate, tailored legal advice. Feel free to call our offices for support from our specialized divorce lawyers in Toronto.