“Unjust enrichment” and common-law relationships

In Nova Scotia, divorcing individuals are automatically entitled to an equal division of matrimonial property (and debts), with a few recognized exceptions such as business assets and gifts.

For those emerging from a common-law relationship, however, it’s not that simple.  If you seek a share of your former partner’s property, you must establish your entitlement to same in court.

One way to do so it to establish that your former partner was unjustly enriched at your expense – that is, he or she accumulated money and property while you sacrificed by, say, leaving your employment to stay home and care for the children.  A recent Supreme Court of Canada decision clarifies the law regarding this doctrine:

The Supreme Court delivered a unanimous decision regarding the Vanasse and Seguin case and a second case from British Columbia. The court ruled that a person deserves fair compensation for making a sacrifice, such as giving up a career, in support of a partner, when he or she is engaged in a “joint venture” as a common-law couple.

“In my view, where both parties have worked together for the common good, with each making extensive, but different, contributions to the welfare of the other and, as a result, have accumulated assets, the money remedy for unjust enrichment should reflect that reality,” wrote Justice Thomas Cromwell.

“The money remedy in those circumstances should not be based on a minute totting up of the give and take of daily domestic life, but rather should treat the claimant as a co-venture, not as the hired help.”

[…]

Hunter Phillips, representing Seguin, said that he was disappointed by the ruling, which he believes has loosened conditions for calculating a monetary reward for unmarried couples in a case of “unjust enrichment.”

This concept of “unjust enrichment” is considered to be defined by a case when one spouse is allowed to accumulate wealth because of an arrangement or sacrifice made by the other partner. But Phillips added that the decision does not guarantee automatic joint property rights for all common-law couples.

“There’s a common misconception amongst the public that a common-law marriage means that after some period of cohabitation, there’s automatic property rights,” said Phillips. “That is wrong and that (Supreme Court) decision doesn’t change that at all.”

A concise summary of the case is posted at the excellent Toronto Family Lawyer Blog.  Full decision, in PDF format, here.

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