Barrie Hayes, Partner, Family Law
The Family Law Act provides a statutory framework for the equalization of family property upon separation. The framework essentially exits out from the equalization the value of property the spouses owned on the date of marriage, and any property the spouses received from third parties; inheritances, life insurance policies, and certain civil judgments during the marriage.
The spouses deduct, from the value of their respective family assets at date of separation, any outstanding debt which then produces the spouses’ respective net family properties. In the event that one spouse has net family property which is greater than the other spouse’s net family property, the spouse with the higher net family property owes a monetary payment to the other spouse equal to one half of the difference in the two net family properties.
This statutory framework provides a fairly focused, straightforward system for settling property issues between separating spouses.
Unfortunately the legislation only applies to legally married spouses. Common-law spouses have no recognition under the Family Law Act for property equalization.
Common-law spouses, in pursuing property issues arising from separation, have to resort to the common-law principle of unjust enrichment. Unjust enrichment will provide monetary relief to a common-law spouse if the common-law spouse can demonstrate that, through either financial or labour contributions made by the spouse, the other spouse was enriched by such contributions. The spouse pursuing unjust enrichment also has also to demonstrate that he/she suffered a deprivation by virtue of the contributions, and further that there was no legal reason justifying the contributions to the other spouse.
Cases dealing with unjust enrichment have increasingly recognized the claim and have broadened its application to common-law spouses.
The Supreme Court of Canada has recently advanced the unjust enrichment principle in creating the concept of a joint family venture in common law relationships. If a common-law relationship is determined to be a joint family venture, the law of unjust enrichment will compensate the contributing common-law spouse for the difference in the increase in assets between the two common-law spouses from the date of commencement of cohabitation until the date of separation.
Although the unjust enrichment principle greatly assists in providing fairness in dealing with property issues between separating common-law spouses, it lacks the precision and certainty provided by the Family Law Act to legal married spouses.
Other provinces in Canada have passed legislation which gives common-law spouses the same statutory property equalization rights as legal married spouses. Hopefully, over time, Ontario common-law spouses will be afforded the same statutory property entitlement.