Basic Principles About Division of Property & Common-Law Relationships
Common-law relationships are increasing in Ontario, as well as the rest of Canada. According to Statistics Canada, one-fifth of Canadians are in common-law relationships.1 Although we may view a common-law relationship as an option similar to marriage, the law treats them differently. This is especially the case when there is a breakup in the relationship and property is to be divided among the two parties.
What is a Common-Law Relationship in Ontario?
In Ontario, two people are considered to be common-law spouses if they are in a conjugal relationship and have cohabitated for at least three years. They can also be considered common-law spouses if they lived together for less time, but they have a child together either through birth or adoption.2
How is Property Divided?
Married couples in Ontario are entitled to the equalization of their family property. This does not apply to common-law couples. Further, common-law couples do not have an equal right to live in the matrimonial home unless they both have ownership of it. The same applies to debts – each person is responsible for paying back their debts. In a situation where both names are on a loan, then either partner is responsible for paying it.
Generally, the rule for common-law couples is two-fold. First, anything purchased during the relationship belongs to the person who paid for it. Second, if something was purchased together, it will likely get divided.
Of course, this can get complicated especially if you have lived together for a long time. Some items are not easy to divide and so you would normally share the value of the property between each party.
Can you make any claim on your Partner’s Property?
There are some situations where you can make a claim to your partner’s property. The most common is making a claim for “unjust enrichment”. This means that throughout your relationship, you contributed to the value of an item that belongs to your partner, and so it would be unfair for your ex-partner to get the full value of item while leaving you with nothing in return.
To make a claim for unjust enrichment, you would need to show three things: (1) you contributed to the property; (2) your ex-partner benefited from your contribution; (3) you suffered a corresponding detriment in return) and (4) there is no reason at law for your ex-partner to retain the benefit.3 This means that there was no contract, it was not a gift, or there
was no legal order saying otherwise. A good example is home. One partner may have purchased the home, but the other partner did a lot of renovations through putting in money and/or labour, which in turn increased the value of the home. The partner who did not purchase the home may have a claim, under unjust enrichment, to the home.
You must also show that your relationship was a joint family venture. Factors that are considered to determine a joint family venture include:
· Economic integration (joint bank accounts or credit cards)
· Did you have children together?
· Priority of the family (did they see themselves as a family unit or as individuals)?
· Actual intent of the parties (do they identify themselves as common-law)?
The more integrated you were as a common-law couple, the more likely a court would a joint family venture.
Another claim is called a “resulting trust”. This means that the property is in your partner’s name, but it isn’t really their property. Rather, it is your property. For instance, Beth gave Thomas $10,000 towards the purchase of a car. Thomas registered the car only in his name. If a dispute arises, Thomas has to show the money was a gift. If he does not, then $10 000 of the car’s value “results” back to Beth.
Ultimately, this type of litigation can be very difficult. This is a very case-specific area of law and so it is difficult to know how the courts will rule. If you want to pursue this type of claim, Tailor Law has very experienced family law lawyers who can help. Contact us today to arrange a free consultation with us. You can reach our office at 905-366-0202 or you can contact us through our website here.
2 Family Law Act, Section 29
3 Kerr v Baranow, Vanasse v Seguin, SCC 2011