Hi, my name is Andrew Morrison and I am an associate here at Feldstein Family Law Group. Today I will be discussing cohabitation and broadly exploring the legal issues, rights and entitlements of cohabitees, or common-law partners. This discussion is important for those who are in a common-law relationship as there is a significant difference between the legal rights and obligations for married spouses and for those in common-law relationships.
The focus of today will be on the issue of property. Part I of Ontario’s Family Law Act addresses the issue of property division in the event of separation. This Part of the Act, however, only applies to married spouses as cohabitees are left in the dark. In order for such a regime to apply to those in a common law relationship, the parties must enter into a cohabitation agreement which addresses the issue of property division in the event the parties were to separate.
In two landmark cases, Kerr v Baranow and Vanasse v Seguin, the Supreme Court of Canada adopted a new principle – the joint family venture. In simple terms, the Supreme Court of Canada extended the idea of an equalization payment, which divides the monetary value of all family property, to those in common law relationships if they meet certain criteria.
The Court will decide whether there is a joint family venture, thus extending the rights of common law couples, on a case by case basis by considering four umbrella factors:
- mutual effort;
- economic integration;
- priority of the family; and
- actual intent.
In relation to mutual effort, the Court will look at indicators such as the decision to have and raise children together, and the length of the relationship in order to assess whether “the parties have formed a true partnership and jointly worked towards important mutual goals”.
In relation to economic integration, the Court will consider whether there is a co-mingling or integration of the couple’s finances, economic interests and economic well-being. Simply put, the more the common law couple acted as though they were one unit, the more likely a Court may find that the parties had been engaged in a joint family venture.
The Court will also consider whether the parties have been proceeding on the basis of understandings or assumptions about a shared future. For example, leaving the workforce for a period of time to raise children, relocating to benefit a partner’s career, foregoing career or educational advancement for the benefit of the family, and accepting underemployment to balance domestic and financial needs are further indicators of the existence of a joint family venture.
The Court, however, has also cautioned that it is necessary to examine the actual intent of the parties. If one of the parties has expressed or conducted themselves in a manner that would demonstrate that they kept their financial and business affairs separated, a Court may find that such negates the possible existence of a joint family venture.
After considering these factors, a Court will make a determination on whether a joint family venture exists. If the Court finds that the parties lived as though they were one unit and there was nothing to demonstrate otherwise, the parties will share in the value of the overall family wealth that accumulated during the parties’ relationship. Again, this sharing of values may be very similar to an equalization payment that one spouse receives after the breakdown of a marriage.
Unlike married spouses, however, who are automatically entitled to such a payment, cohabitees must establish that a joint family venture exists prior to being entitled to its remedy. As such, these claims can be complex. In the event that you are contemplating separating from your common law partner or have in fact done so, it is important to consult with a lawyer to discuss your legal rights and obligations.