Common-Law Property Division

Property Division for Unmarried Spouses

Unlike married spouses, there is no legislation governing the division of property when common-law spouses separate in Ontario.  The ownership of property for unmarried spouses is determined, at first instance, by who holds legal title to an asset or liability.  Of course, this may create acrimony when one spouse feels that this division is unfair, or when that spouse feels that he or she contributed to the acquisition of the asset, but cannot assert a valid claim over it.  Fortunately, in Ontario, a spouse may assert a claim to an interest in a specific asset held by the other spouse or to a payment representing the contributions to the wealth held by the other spouse.

If you are married and wish to understand your rights concerning property division, the article Equalization of Net Family Property may provide valuable insight.

In a nutshell, a claimant spouse is saying to the court that “I am aware that I have no interest in this property from a legal standpoint.  However, I am asking that the court go outside the black letter of the law and determine, on a review of the facts, that I am entitled to be compensated for my contributions to this person or directly to this property”.

Depending on the facts, you may be able to assert a claim for a resulting trust or for unjust enrichment.

Resulting Trust

A resulting trust occurs when you either:

1. directly contributed to the purchase of a specific property but are not on title; or
2. transferred property you owned to your spouse without receiving anything in return.  

A resulting trust may be found where a wife gratuitously added the husband as a joint tenant on a home which she owned, and the husband could not rebut the presumption that a resulting trust existed.  The home resulted back to the wife and the husband’s claim for a share of the sale proceeds of the family home failed.^[1]

Unjust Enrichment

To successfully make out a claim of unjust enrichment against your spouse, you must prove three things:

1. that your spouse received a benefit;
2. that you suffered a loss corresponding to the benefit; and
3. there was no juristic reason for the benefit and corresponding loss.

For more information on unjust enrichment, please see our other blog post: “Buying a House with a Boyfriend”.

Unlike property division between married spouses, the law of unjust enrichment does not create a presumption of an equal division in the increase in value of the parties’ property from the date of cohabitation to the date of separation.  In addition, the mere fact that spouses cohabited does not establish an entitlement of one party to share in the other party’s property.  

Joint Family Venture

A further consideration for unmarried spouses when they separate is whether they were engaged in a joint family venture (JFV).  JFV may be found in relationships where spouses used their joint efforts to accumulate wealth and to manage their affairs, as if they were married.  If the court finds that there was a joint family venture, a spouse may be entitled to share in the accumulated wealth in proportion to his or her contributions.  

The court will consider the following four factors when determining whether there was a JFV:^[2]

1. Mutual effort: did the parties work together towards common goals?  Think pooling effort towards the relationship, childcare, and length of relationship.
2. Economic integration: were there economic interdependence between the parties?  Think joint accounts, RRSPs, whether spouses designated each other as beneficiaries under their life insurances.
3. Actual intent:  were there intentions, expressed either directly or indirectly, as to whether the parties wanted each other to share in the wealth they jointly created?  
4. Priority of the family: to what extent did the parties give priority to the family in their decision making?  Consider the spouses’ contributions to the relationship, sacrifices they made to the family, and whether one party relied on the relationship to his or her detriment for the sake of the family.

Evidentiary Considerations

Any spouse who wishes to assert claims for unjust enrichment requires significant evidence.  Hummingbird Lawyers LLP provide qualified, skilled, and experienced lawyers in Toronto and Vaughan for cases involving property division between common-law spouses.  We are committed to giving our clients the convenience, expertise, and guidance they need.