Common Law in Ontario

Cohabiting/Common Law Couples: How Your Rights Compare to Married Couples

Although you may expect that, as a common law spouse, you have the same rights and obligations as married spouses, this is not the case. It is important to know and understand the distinctions between married and cohabitating spouses in order to protect yourself in the event that your relationship breaks down.

With a history of representing clients that spans over 20 years, we at Feldstein Family Law Group P.C. understand the intricacies of common law and cohabitation. Our Ontario family lawyers can provide helpful insight regarding your rights as a common law spouse, and we can protect these in any legal matter affecting property and assets, children, support, or separation.

Call (905) 581-7222 today for a free consultation with one of our lawyers. We serve Mississauga, Vaughan, Oakville, Markham, and all of Ontario.

Common Law & Family Property

Under the Family Law Act (FLA), there is equal division of financial gains of the marriage. The net family property is found for both spouses, and then the wealthier of the two pays half of the difference to the other spouse. There is limited judicial oversight and spouses are free to dispose of assets other than the matrimonial home. However, the FLA property regime only applies to “spouses” as defined in s.1 of the FLA. Therefore, only married spouses and not cohabitating spouses may benefit from an equalization of family property.

Although this distinction has been called into question, in Nova Scotia v Walsh, the Supreme Court of Canada held that the discrepancy between married and cohabitating spouses is not discriminatory, as married spouses have made a conscious choice to enter into a marriage, rather than live common law.

There are, nevertheless, remedies available at common law for cohabitating spouses: namely, the constructive trust resulting from an unjust enrichment (Becker v Petkus, Kerr v Berenow). A constructive trust allows a cohabitating spouse who is not on title to gain a right to property in a particular asset, such as the matrimonial home. Thus, a cohabitating spouse who has stayed home with the children and completed the majority of domestic services may be awarded a monetary award or a constructive trust over the matrimonial home where their contribution is connected to the home itself.

A spouse seeking a constructive trust order must establish four requirements:

  1. That by their contribution of money or labour, they enriched the legal titleholder of the property in question;
  2. Enrichment of the other spouse resulted in a corresponding deprivation to the contributor;
  3. There is no juristic reason for the enrichment (anything which might explain the differential, eg. a contract or gift); and
  4. There is a connection between the contribution made and the acquisition or improvement of the property in question.

Without the fourth requirement, courts will only award monetary damages and not the property itself. Finally, courts award property in proportion to the contribution made.

Possession of the Matrimonial Home

The matrimonial home is treated distinctly from all other property. Irrespective of which spouse has title to the matrimonial home, both spouses have equal right to possession (s. 19 of the FLA). Even a marriage contract made prior to the marriage/period of cohabitation will not be binding (s. 52(2) FLA). Regardless of who has proprietary rights to the matrimonial home, the court can make an order for exclusive possession (s. 24(1)(b) FLA). The legislation protects possessory rights in the matrimonial home because there is sometimes a need to evict one spouse in order to prevent domestic violence or to mediate against the impact on children.

In determining whether to make an order for exclusive possession, the court must consider:

  • The best interest of the children affected;
  • Any existing orders respecting family property or support orders;
  • The financial position of both spouses;
  • Any written agreement between the parties;
  • The availability of other suitable and affordable accommodation; and
  • Whether there has been any violence committed by a spouse against either the spouse or the children.

Once again, Part II of the FLA only applies to married spouses, and accordingly, unmarried cohabitating spouses do not have access to the same possessory rights.

Fear not; unmarried cohabitating spouses have a few different options.

First, cohabitating spouses who have lived together for a period of not less than 3 years or who are in a relationship of some permanence, if they are the natural or adoptive parents of a child, may apply for the matrimonial home as part of spousal support under s. 29 of the FLA. According to s. 34(1)(d) of the FLA, the court may make an interim or final order respecting the matrimonial home.

Second, although it doesn’t lead to exclusive possession, cohabitating spouses may get a constructive trust over the matrimonial home, which gives each spouse a joint equitable interest in the home and therefore joint possessory rights in the home as well (equal right to live in the home).

Third, on application, the court may make an interim or final restraining order against a person who is a spouse/former spouse of the applicant or a person who is cohabitating or has cohabitated with the applicant for ANY period of time (s. 46(2) FLA). An interim or final restraining order may be made if the applicant has reasonable grounds to fear his or her own safety or the safety of any child in his or her custody (s. 46(1) FLA).

Finally, in certain scenarios, if a cohabitant is charged criminally, bail conditions may exclude the offender from the matrimonial home.

In effect, the common law has swooped in to remedy many of the injustices that result from separate regimes for married and unmarried cohabitating spouses.

Common Law Relationships & Division of Assets

The Family Law Act R.S.O. 1990, c. F. 3 only applies to couples who satisfy the definition found in s. 1(1) relating to equalization of net family property:

  1. In this Act, “spouse” means either of two persons who,
    1. are married to each other, or
    2. have together entered into a marriage that is voidable or void, in good faith on the part of a person relying on this clause to assert any right. (“conjoint”)
  2. In the definition of “spouse”, a reference to marriage includes a marriage that is actually or potentially polygamous, if it was celebrated in a jurisdiction whose system of law recognizes it as valid.

So, what happens to property acquired during a common law relationship when the individuals separate? Normally, property is owned by the individual who holds legal title to it and is distributed on that basis. There is no net family property calculation or equalization payment contemplated in common law situations where there is a separation.

If you were/are in a common law relationship and you feel as though you should be entitled to an interest in or compensation for any contributions made to the acquisition, preservation, or maintenance of property, you have options.

You may do the following:

  • Ask your partner to pay you back for any contributions, both financial and non-financial, that you have made towards the property; or
  • If your partner does not agree to pay you back, you may go to court and make one of the following claims:
    • Resulting trust;
    • Constructive trust; or
    • Unjust enrichment.

Resulting Trust

A resulting trust arises when one individual pays for (or helps pay for) a piece of property, yet legal title is vested in another individual. It would seem unfair to not allow the individual who funded the acquisition, in whole or in part, to retain some interest in the property. Therefore, he or she becomes the beneficial interest holder and it is presumed that the legal title holder is the trustee for the beneficial interest holder.

When the separation occurs, the interest equal to the contribution is returned. This means that the courts may order that it is either jointly owned or fully owned by the spouse who paid for it.

The Supreme Court of Canada, in a 1980 decision, stated that a resulting trust will be found when the court is satisfied that there is a common intention, ascertained by the words or conduct of the parties, that the beneficial interest would not belong solely to the spouse in whom the legal estate was vested but was to be shared between them in some proportion or other.

In summary, a resulting trust is a rebuttable presumption that, at the time when the contributions were made and accepted, the parties both intended that there would be a resulting trust in favor of the donor to be measured in terms of the value of the contributions made. Clear evidence indicating a “common intention” would be where purchase money is taken from a joint bank account into which both spouses have deposited funds.

Constructive Trust

A constructive trust allows an individual to share in the value of property (or acquire an interest in it) even though he or she does not hold legal title. This is due to the fact that the individual has contributed to the value of the property through work, money, etc., making it unfair to deprive him or her from a share in the value, or increase in value, of the property.

Unlike a resulting trust, there is no need to find evidence of a common intention to establish it. Courts will only impose a constructive trust when the test enunciated by the Supreme Court of Canada in 1980 is satisfied.

The test is premised on the principles of unjust enrichment:

  1. There must be the enrichment of one of the spouses;
  2. A corresponding deprivation of the other spouse; and
  3. No juristic or legal reason for the enrichment. You should note that a legal reason would be:
    1. Making a gift; or
    2. The presence of a contract.

Once the three factors have been satisfied the next step involves showing a causal connection between the contribution made and the property. If this connection is proven then a constructive trust will result.

Must ask: “Was her/his contribution sufficiently substantial and direct as to entitle her to a portion of the profits realized upon the sale of property X and/or an interest in property X?”

You should be aware of the fact that a contribution does not always take the form of a contribution to the actual acquisition of the property because a contribution relating to the preservation, maintenance, or improvement of the property may suffice.

The extent of the interest must be proportionate to the contribution of the spouse claiming a constructive trust. Where the contributions are unequal, the shares will be unequal.

The contributions may be either financial or non-financial. A non-financial contribution may include, but is not limited to, one of the following:

  • Taking care of children so that the other spouse may earn an income and purchase the property in question.
  • Taking full responsibility for all the domestic chores (i.e. cooking, doing laundry, cleaning) so that the other spouse may focus on his or her profession resulting in an increase in income and acquisition of property.

However, in order for these to constitute contributions for the purposes of a constructive trust, it is necessary that no compensation was given or else the spouse has no claim.

Unjust Enrichment

Lastly, if all else fails, or if it is impossible to prove a connection between the contribution made and the property in question (usually due to the fact that the relationship is of a short duration), a simple claim for unjust enrichment may be made.

Here, the courts will apply the three aforementioned principles of unjust enrichment to try and remedy a fundamentally unfair situation where as a result of one individual’s efforts the other will end up with a benefit. The deprived party will get the value of their contribution. Otherwise known as quantum meruit, this is the amount that the benefitted party would have had to pay for the contributions made. Remember that a common law spouse is under no obligation to render services to a partner and so there is a presumption that such services will be compensated.

Property, division of assets, and other issues are complex under common law, but they can be resolved. Talk to an Ontario family lawyer at Feldstein Family Law Group P.C. today by calling (905) 581-7222.

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