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Jun

23

Common Law Breakups – (Part 3) Examples of how property can be divided…

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 the third blog in a series I’m writing about how property and other issues are dealt with on the breakdown of a common law relationship. 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. I reviewed these equitable doctrines in my second blog. In this blog, I’ll review some examples of how courts have applied these doctrines to actual real life cases.

Peter v. Beblow: CONSTRUCTIVE TRUST + 100% interest in FAMILY HOME
In Peter v. Beblow, [1993] 1 S.C.R. 980, the Supreme Court of Canada considered whether a partner in a long-term common-law relationship could claim restitution for contributions made to the family home during the period of cohabitation. The Supreme Court found that the common law wife had maintained the family home through work in cooking, cleaning and landscaping – which helped preserve the property and saved the common law husband large sums of money which he used to pay off his mortgage and purchase a houseboat and a van. The trial judge found that the common law husband had been enriched, that the common law spouse had not been compensated, and that there was no juristic reason (e.g. gift, contract) for the enrichment. As such, the common law wife had a claim for UNJUST ENRICHMENT (see my previous blogs for more about this). Now, since it was difficult to provide the common law wife a monetary award, the doctrine of CONSTRUCTIVE TRUST came into light. This remedy was appropriate because the common law wife had established an UNJUST ENRICHMENT AND was also able to establish a link between the contribution that founds the action and the property in which the constructive trust is claimed. On these grounds, the Supreme Court did not disturb the trial judge’s findings, stating that the house reflected a fair approximation of the value of the common law wife’s efforts in acquiring the family assets.

Gauci v. Malone: CONSTRUCTIVE TRUST + 20% interest in FAMILY HOME
In Gauci v. Malone, [2009] O.J. No. 2627, the Ontario Superior Court of Justice was dealing with a situation similar to that in Peter v. Beblow (discussed above). The parties cohabited for 7 years before ending their relationship. One of the issues that arose was the common law wife claiming a CONSTRUCTIVE TRUST over the family home. The Court cited Peter v. Beblow and found that the common law wife had improved the backyard and garden areas of the home and was primarily responsible for childcare, meals, and housecare. Through her efforts, despite not being compensated, the common law husband and the property had been enriched. There was no juristic reason for the enrichment. As such, the court found that the common law spouse had made out an UNJUST ENRICHMENT claim. Now, given that the common law husband did not have discretionary funds available to pay, the Court concluded that a monetary award was not appropriate and therefore gave her a 20% ownership interest in the family law pursuant to the doctrine of CONSTRUCTIVE TRUST. That amount would not be realized or paid to her until the home was sold or until her two children were no longer dependents.

Rendell v. Normore: UNJUST ENRICHMENT + $20K
In Rendell v. Normore, [2008] O.J. No. 3287, the Ontario Superior Court of Justice dealt with the issue of whether a women could assert claims against her former partner based on RESULTING or CONSTRUCTIVE TRUST or UNJUST ENRICHMENT. The parties had been together for 4 years. During that time, the man purchased a family home in his name and made all mortgage and other payments (e.g. utilities, taxes, etc.) related to the home. The woman claimed an interest in the house and property purchased by the man during the time they lived together. The Court first looked at whether the woman could claim a RESULTING TRUST. Recall that, for a RESULTING TRUST to be established, there must be a common intention expressed or implied between the parties such that the woman would have had an interest in the property. The Court could find no evidence of such an intention. The parties conducted themselves in a manner that demonstrated that they had no intention of giving the woman any interest in the property. It was purchased and maintained solely by the husband, and purposely structured this way by the parties. SO NOT RESULTING TRUST CLAIM was found. What about CONSTRUCTIVE TRUST? Well, in this regard, the Court found that the woman had made some financial contribution to the relationship and property from her work and services (e.g. paying for household bills, food, gas, renovations, etc.). But the Court concluded that CONSTRUCTIVE TRUST was not an appropriate remedy since the man had made a more significant contribution to the relationship and the property. Thus, in the grand scheme of things, the Court ordered the man to simply compensate the woman $20,000 because he had been unjustly enriched by the woman’s work and services.

Robichaud v. Anderson: CONSTRUCTIVE TRUST +$43K
In Robichaud v. Anderson, [1989] O.J. No. 3031, the Ontario District Court deal with a situation involving a common law husband seeking an interest in the family home which the common law wife owned. That husband also sought half the proceeds of an investment home which the parties had acquired together through an investment. The parties had been together for over 11 years. The court found NO common intention for the husband to have an interest in the home (so NO RESULTING TRUST); that said, the Court concluded that the husband had an interest in the home on the basis of CONSTRUCTIVE TRUST. The Court reasoned that the husband had shared living expenses, contributed time and labour to improving the property, and claimed that the common law wife had promised him a 1/2 interest in the property. The Court found that the husband had established an UNJUST ENRICHMENT CLAIM and that monetary damages in the amount of $43,300 was appropriate. The Court ordered the family home to be sold to pay for this amount. With respect to the investment property, the Court found no evidence supporting the husband’s claim for unequal division of the proceeds. The investment agreement provided for equal division, and this was ordered.

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cohabitation agreement ontarioCohabitation Agreement (Ontario) – Terminates Upon Marriage

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