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Jun

23

Common Law Breakup – (Part 2) Property claims to watch out for!

Please note that the information provided herein is not legal advice and is provided for informational and educational purposes only. If you need legal advice with respect to ending a common law relationship, you should seek professional assistance (e.g. make a post on Dynamic Legal Forms). We have Toronto, Ottawa, Hamilton, Brampton, Mississauga and other Ontario lawyers registered to help you. If you’re looking for a cohabitation agreement that avoids creating financial obligations on the parties and terminates when the parties get married, then check out our legal forms + video guides. You can contact me directly if you need a lawyer.

So this is my second blog post about common law breakups in Ontario. In my first blog, I mentioned how common law relationships end differently from married ones because the Family Law Act does not give a non-married spouse rights to the other spouse’s property. Then I mentioned how non-married spouses use EQUITABLE doctrines such as UNJUST ENRICHMENT, CONSTRUCTIVE and RESULTING TRUST to try to create interests, rights and entitlements to the other spouse’s property. Finally, I reviewed a recent Ontario Superior Court of Justice case which reviewed the law of those doctrines in the context of common law relationship breakdowns.

In this blog, I just want to recap what those doctrines are all about.

UNJUST ENRICHMENT
The doctrine of unjust enrichment is not found in any statute. Rather, it is an old judge-made law that allows one party to claim compensation from another party on the basis of an unjust enrichment. 3 requirements must be met in order for a common law spouse to claim unjust enrichment:

(1) an enrichment enjoyed by the other spouse;

(2) a corresponding deprivation suffered by the complaining spouse; and

(3) the absence of a juristic reason for the enrichment.

Now, it these 3 elements exist, then a common law spouse may be entitled to damages. Where simply having the other spouse pay money is not enough, then the doctrine of CONSTRUCTIVE TRUST comes into play.

CONSTRUCTIVE TRUST
If there was an unjust enrichment and there was a link between the contribution that founds the action and the property in which the constructive trust is claimed, then the complaining spouse may receive an ownership interest in that property. To recap, the idea behind a constructive trust is as follows. The common law relationship ends. Only one spouse holds title to property. If there was an unjust enrichment and monetary damages would not be a sufficient remedy, then the complaining spouse may receive an ownership interest in the other spouse’s property.

RESULTING TRUST
When common law spouse separate and only one of the spouses own a property, the Court will ask whether or not there was an agreement or COMMON INTENTION that the other spouse was to take a beneficial interest in that property. The court will look to the facts and circumstances surrounding the acquisition, or improvement, of the property. If the spouse with no title in the property has contributed, directly or indirectly, in money or money’s worth, to acquire or improve the property, the doctrine of resulting trusts is engaged. An interest in the property is presumed to result to the one advancing the purchase moneys, or part of the purchase monies.

So when will a Court find COMMON INTENTION if there is no agreement? The Court will have to gleam this from the conduct of the parties if it is not expressly made. The Court will look at financial arrangements in acquiring or maintaining the property. The Court may also look at who benefited from the property (either directly or indirectly).

So, there you have it: UNJUST ENRICHMENT, CONSTRUCTIVE TRUST, and RESULTING TRUST.

If at the dissolution of a marriage one spouse alone holds title to property, it is relevant for the court to ask whether or not there was a common intention, or agreement, that the other spouse was to take a beneficial interest in the property … It is relevant and necessary for the courts to look to the facts and circumstances surrounding the acquisition, or improvement, of the property. If the wife without title has contributed, directly or indirectly, in money or money’s worth, to acquisition or improvement, the doctrine of resulting trusts is engaged. An interest in the property is presumed to result to the one advancing the purchase moneys, or part of the purchase monies.

In other words, the remedy of constructive trust arises, where monetary damages are inadequate and where there is a link between the contribution that founds the action and the property in which the constructive trust is claimed.”

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cohabitation agreement ontarioCohabitation Agreement (Ontario) – Terminates Upon Marriage

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