Common Law Spouses and Unjust Enrichment

Common Law Spouses are defined as those couples that are not married and have a child or have resided together in a relationship for three years or more.

The Family Law Act does not set out specifically how property division is to be determined for common law relationships.   The Family Law Act sets out a formula in order to determine the division of property in the event of a breakdown of a marriage between two people.

The recent Supreme Court of Canada decisions of Kerr v. Baranow and Vanasse v. Seguin  are very important decisions that dealt with the property rights of common law spouses on the breakdown of their relationship.  The following findings were, in essence, made by the court:

1. The law of unjust enrichment will be the vehicle to address the distribution of assets on the breakdown of a common law relationship;
2. The plaintiff must confer an enrichment/ benefit on the defendant (ie. the plaintiff must show that he/she gave something to the defendant, which the defendant retained and which has enriched the defendant and can be restored to the plaintiff in specie or money);
3. There must be a corresponding deprivation of the plaintiff (there must be a nexus between the two – a link between the contribution and the accumulation of wealth – the plaintiff’s loss is material only if the defendant has gained a benefit or has been enriched);
4. There must be an absence of a juristic reason for the enrichment (there is no reason in law or justice for the defendant to retain the benefit conferred by the plaintiff – there is a contract, or a gift or some other reason why the retention is unjust).  The provision of domestic services may support a claim for unjust enrichment;
5. The object of the remedy for unjust enrichment is to require the defendant to reverse the unjust enrichment, usually by a monetary award.  It may be problematic to quantify the monetary remedy.  However, the award should reflect the nature of the enrichment and the corresponding deprivation. The parties will share their accumulated wealth proportionate to the plaintiff’s contributions;
6. To be entitled to a monetary remedy on a value survived basis (increase in the value of the property), the plaintiff must show that there has been a “joint family venture” – a link between his/her contribution and the accumulation of wealth;
7. In order to determine if there is a “joint family venture” the court must look at all of the circumstances of the parties (ie. mutual effort, economic integration, actual intent, teamwork etc.)  There must be a link between the plaintiff’s contributions to the relationship and the substantial accumulation of wealth the family achieved;

If there was a total integration of the family and the relationships and contributions look like a marriage (with no marriage licence), it is possible that a court will divide the accumulated wealth equally.

In some cases, a court might determine the increase in the value of the parties property acquired during the relationship and set it off against the benefits conferred by the defendant on the plaintiff  (ie. gifts, accommodation, travel, entertainment etc.).  This will not be an easy calculation. One of our Toronto family lawyers can help with this.  It may be based on a percentage of the increase in the defendants net worth since the commencement of the date of cohabitation.  The determination is significantly different than as determined for the division of property for married parties in accordance with the Family Law Act.

Get Legal Help with Your Common Law Property Situation

It is difficult to advise exactly what a separating common law spouse is entitled to based on the aforementioned guidelines.  Contact one of our Toronto divorce & property division lawyers to examine your situation and discuss how best to proceed. Book a free consultation.