August 14th 2023
In 2020, Ontario saw a sharp decline of 36% in the number of married couples. This is due largely to individuals who choose to carry on as a “common law” couple. This choice is most popular among couples 65 and older, most of whom were previously divorced and do not want to remarry. Notwithstanding the increased occurrence of common law couples, there is no legislation in Ontario that automatically protects an unmarried partner in dividing property when there is death or separation.
At this time, the Family Law Act’s section on property division is only applicable to married spouses. This means no matter how long the relationship was between an unmarried couple, whether 5 years or 20, neither spouse has an inherent right to equalization of property. Generally speaking, with property division, each unmarried spouse is only entitled to the property registered in their own name. Consider a scenario where you have lived together for 10 years in a home owned solely by your spouse. During this time, you’ve not only contributed half of all bills but also $50,000 towards renovations which in turn increased the value of the home. It might surprise you to learn that unless there was a prior agreement between you and your spouse, you have no automatic right to the return of your contributions nor a right to share in the growth of equity caused by such contributions. As will be discussed below, there are common law tests that can be relied upon to protect you, so speaking with a trusted legal professional is recommended.
Without a prior written agreement, an unmarried couple’s main recourse in dividing property is by making a claim for unjust enrichment. Unjust enrichment can occur when a non-titled spouse’s efforts enrich the titled spouse while being deprived of any benefit from these efforts. In a claim of unjust enrichment, the applicant must prove the enrichment of the titled spouse (the Respondent), the corresponding deprivation of the applicant, and lastly the absence of any juristic reason why the Respondent should benefit from the enrichment.
The court in Kerr v Baranow, held that a claim for unjust enrichment could arise through a joint family venture. A joint family venture is when both parties contributed to the accumulation of family wealth during the relationship. Unjust enrichment would then arise upon separation if one party retains a disproportionate amount of the wealth they’ve accumulated. In determining whether the parties were engaged in a joint family venture, the court reviews various factors, which this article will not be able to properly address in the limited space available. If you are in a situation where you believe you may be entitled as a common law spouse, it is best to consult with a legal professional.
As you can see, there are several issues that unmarried couples face when dealing with property division on death or separation. For this reason, it’s often recommended that couples have a cohabitation agreement. A cohabitation agreement can offer both parties assurance of the outcome of a breakdown of the relationship or the death of one of the spouses. A cohabitation agreement can be as simplistic or detailed as one sees fit. The agreement could provide that the non-titled spouse will not have any rights to the home owned by the titled spouse, notwithstanding any contributions they may make, and vice-versa, it can ensure the return of any contributions made by the non-titled spouse but without having an interest in any equity in the home. Ultimately, the goal is to take reasonable steps to ensure that the expectations of couples are met during their lifetime to avoid litigation on death or separation. For any family law questions concerning cohabitation agreements, Liddiard Law is happy to offer you a no-obligation consultation, so do not hesitate to contact us!
Kim Pollard,
Law Clerk for Liddiard Law Professional Corporation.
Marriage Statistics in Canada https://nussbaumlaw.ca/marriage-statistics-in-canada/ Kerr v. Baranow, 2011 SCC 10, [2011] 1 S.C.R. 269