Although Ontario common law spouses have a statutory right to receive spousal support upon separation, there is no statutory recognition of common law spouses in claims for property. The Family Law Act, in dealing with equalization of net family property, limits spouses to legal married spouses only.
Courts in Ontario, however, have historically granted common law spouses entitlement to compensation, monetary or property, against another common law spouse on the basis of the equitable principles of unjust enrichment, quantum meruit and resulting trust.
Unjust enrichment relief will be granted when a claiming common law spouse ( claiming spouse) can prove:
1) that the claiming spouse has provided enrichment or benefit to the other spouse;
2) that the claiming spouse suffered a corresponding economic deprivation;
3) that there was an absence of juristic reason (ie: no reason in law or justice) for the common law spouse claimed against to retain the benefit conferred by the claiming spouse.
If the claiming spouse can show that his or her benefit provided to the other spouse was connected, in fact, to a specific property, the unjust enrichment remedy award could be secured by the court granting a constructive trust in favour of the contributing spouse against title to the property in question. In circumstances where monetary remedy was appropriate a lump sum monetary re-imbursement was paid to the claiming spouse on the basis of the doctrine of quantum meruit.
The courts have historically also used the legal remedy of resulting trust in common law situations to grant an interest in a claiming spouse to the acquisition of property where the court was satisfied that it was the intention of both parties that, even though legal title of a property was registered in the name of one spouse, the legally titled spouse was, in actuality, holding title in the property in trust for the benefit of the claiming spouse.
The doctrine of unjust enrichment frequently arises out of the following fact situation:
Common law spouse A (the contributing spouse) moves in with common law spouse B (the unjustly enriched spouse) into spouse B’s home, which spouse B solely owns.
Over the course of several years, while the spouses are co-habiting in spouse B’s home, spouse A contributes monies to pay down the mortgage and provides labour and service (ie: provision of meals, housekeeping, assisting in renovations and/or improvements to the property, maintaining the property), which over time increased the value of the property by increasing the equity in same and the fair market value of the property.
Following separation of the spouses, the court would examine and quantify the amount of increase in value for spouse B’s home and determine whether, on the basis of the three unjust enrichment principles enumerated above, spouse A is entitled to receive either a monetary award for the labour or services provided or a percentage interest in the increase in the value of the home owned by spouse B.
The Supreme Court of Canada, in recent judgments of two cases has taken a fresh look at the concept of unjust enrichment. The court ruled that the resulting trust remedy has been all but eliminated as a remedy in a family law proceeding. The three principle elements of unjust enrichment were affirmed by the court, which held that in pursing the unjust enrichment the claiming spouse must show that the enrichment does not fall within an established juristic reason (ie: contract disposition of law). If the enrichment does not fall within the established categories, then the claiming spouse has established a prima face case of unjust enrichment arising from a disproportionate sharing of assets accumulated during the period of common law cohabitation.
The court labeled common law relationships wherein unjust enrichment entitlement arises as “joint family ventures”. The court held that the claiming spouse must show that there is a joint family venture and that there was a link between his or her contribution to the venture and the accumulation of wealth.
Some of the factors listed in establishing that a common law relationship was a joint family venture are as follows:
1) the pooling of efforts;
2) the decision to have and raise children together;
3) the length of the relationship;
4) the joint contribution to a common financial pool;
5) the use of parties funds entirely for family purposes;
6) the extent of economic integration of the family such as the sharing of expenses and amassing common savings.
7) The priority of family (ie: contributing spouse leaving the workforce to raise children or relocating to benefit the other spouses’ career.
Although the Supreme Court, by establishing the concept of the joint family venture, has more clearly identified a legal mechanism for establishing an unjust entitlement, the nature and extent of the relief (the amount of monetary damages or percentage interest in the other spouse’s property) has not been addressed and will still continue to be determined at the discretion of a trial court judge.