Facts
The Applicant Wife and the Respondent (in her capacity as Estate Trustee of the Estate of the husband), were involved in a dispute arising from the breakdown of the Applicant’s 40-year marriage to the deceased.
The Applicant and deceased began cohabiting in 1977 and married in 1980. During the marriage, the Applicant was the primary income earner and deposited her employment and retirement income into the parties’ joint bank account. Those funds were used to pay most household expenses, including utilities associated with the Black Walnut property (a property which only the deceased had title). The Applicant’s father also loaned the deceased over $227,000 to construct a building on the property without receiving interest payments.
In 2017, their relationship began to deteriorate. The parties started living separately while trying to reconcile with the deceased living at the Black Walnut property. The parties then separated in December 2020 after approximately 40 years of marriage.
The Applicant commenced a family law application in July 2022 seeking, among other relief, a declaration that she held an interest in the Black Walnut property.
Before the matter was resolved, the deceased unexpectedly died in March 2023. The Applicant elected to receive an equalization of net family property under the Family Law Act rather than inherit under the deceased’s will. The equalization issues were later resolved by consent, and the Respondent paid the Applicant an equalization payment of $34,116.92. The only issue remaining for trial was the Applicant’s unjust enrichment claim.
Issue
Can the Applicant recover an additional monetary award for unjust enrichment based on a joint family venture after already receiving an equalization of net family property under the Family Law Act?
Analysis
The Court held that the Applicant’s claim could not succeed because the parties’ financial relationship was governed by the terms of equalization established under the Family Law Act.
The Court acknowledged that unjust enrichment claims remain available to married spouses in exceptional circumstances. However, those circumstances generally arise where the equalization process fails to account for the true economic partnership between the parties. The Court distinguished decisions such as Mullin v. Sherlock, where a lengthy period of pre-marital cohabitation meant that significant wealth accumulated before the marriage and would thus not be captured by equalization. In this case, no comparable circumstances existed.
The main reason as to why the Applicant’s claim fails is that there is a lack of juristic reason. The Family Law Act itself constituted a juristic reason for any enrichment retained by the deceased’s estate. Equalization reflects the Legislature’s policy that marriage is an equal economic partnership and that the increase in the parties’ wealth between the date of marriage and the date of separation is to be divided through the net family property calculation, subject only to the exceptions contained within the Act.
Although the Applicant argued that the parties had participated in a joint family venture, the Court held that even if such a venture existed, the Family Law Act already provided the statutory mechanism for addressing the parties’ economic partnership through equalization. As a result, the existence of a joint family venture did not displace the juristic reason created by the Act.
The Court further noted that the Black Walnut property had already been included in the net family property calculation as the deceased’s asset. Had the Applicant’s asserted ownership interest been recognized before equalization, the equalization calculation itself would have been different and could have reduced or eliminated the payment owed to the Applicant. Allowing the Applicant to recover an additional share of the property’s post-separation appreciation after equalization would effectively permit a second recovery outside the statutory framework and undermine the purpose of the Family Law Act.
Conclusion
The Court dismissed the Applicant’s unjust enrichment claim. It held that the Family Law Act fully governed the parties’ economic relationship and provided a juristic reason for any benefit retained by the Respondent. Because no exceptional circumstances justified departing from the statutory framework, the Applicant was not entitled to recover an additional $97,106 representing one-half of the Black Walnut property’s post-separation increase in value.
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Categories: Divorce, Separation, Equalization, Unjust Enrichment.