Hello, my name is Shazia Hafiji and I am an Associate at the Feldstein Family Law Group.
Today, we’ll be discussing cohabitation (or common-law relationships) and the issue of property.
To start, the law pertaining to property differs significantly depending on whether you are married or common-law.
Specifically, Part I of Ontario’s Family Law Act addresses the issue of property division in the event of separation; and this part of the Act applies only to married spouses.
If common-law spouses want the Family Law Act’s property division regime to apply to their relationship, they are required to enter into a cohabitation agreement that specifically addresses and allows for this.
But what about separating common-law spouses who didn’t sign a cohabitation agreement? That’s where the principle of joint family venture comes in.
In two landmark cases, the Supreme Court of Canada extended the idea of an equalization payment, which simply divides the monetary value of all family property, to those in common law relationships. In order for this principle of joint family venture to be applicable, a part must demonstrate that their common-law relationship meets certain criteria.
Generally, courts extend property division rights to common-law couples on a case-by-case basis. In doing so, court’s consider several factors: (a) mutual effort; (b) economic integration; (c) priority of the family; and (d) actual intent.
- In terms of mutual effort, courts will consider the length of the relationship, look for indicators such as the decision to have and raise children together, and assess whether the parties formed a true partnership and jointly worked towards important mutual goals;
- For economic integration, courts will look to see whether there was a comingling 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.
- Courts will also assess whether the parties proceeded on the basis of a mutual understanding or an assumption about a shared future. For example, if one spouse left the workforce to raise the parties’ children, or if the spouses jointly relocated in order to benefit one of the spouse’s career.
- Courts have also cautioned that it is necessary to examine the actual intent of the parties. For example, if one or both of the spouses kept their financial and business affairs separated, a court may find that the parties did not engage in a joint family venture.
After considering these factors, courts will make a determination on whether a joint family venture exists.
Where a court is satisfied that the spouses did live as though they were one unit, the court will order that the parties share in the value of the overall family wealth that accumulated during the parties’ relationship.
Unlike married spouses, who are automatically entitled to such an equalization payment, cohabitees must establish that a joint family venture existed in order to be entitled to such a remedy.
As I’m sure is evident, these claims can be complex. In the event that you are contemplating separating from your common law partner or have in fact already done so, it is important to consult with a lawyer to discuss your legal rights and obligations.
If you have further questions regarding cohabitation and property rights of cohabitees, please visit our website at www.separation.ca or call us for an initial consultation at 905-581-7222.