The Appropriate Remedy
In a common law separation Canada, once a court has found that there has been an unjust enrichment, the court must decide what to do (the remedy).
The court has two choices: it can award quantum meruit, or impose a constructive trust (both of these terms are explained below).
Quantum meruit is an award of money to compensate a spouse for the contribution he or she has made that unjustly enriched the other spouse.
A constructive trust is a finding that although property is in one spouse’s name, he or she is actually holding it for the benefit of the other spouse.
He or she must then transfer the property to the other spouse.
When a court imposes a constructive trust, it is effective from the date of separation.
Quantum Meruit or Constructive Trust?
Generally, Canadian courts prefer to award quantum meruit.
For a court to impose a constructive trust, quantum meruit must be inadequate, and there must be a connection between the property and the spouse’s contributions.
However, this connection need not be obvious. It can be as subtle as a recognition that her work freed her partner to create the wealth and savings that bought the asset.
A constructive trust may also be imposed where it is difficult to calculate what the amount of the quantum meruit award would be.
This is particularly the case in long-term common law relationships in Canada, or where there are children.
Related Articles On Common Law Property Division
Unjust Enrichment – how property is divided on common law separation in Ontario.
Find out the defences – to a claim for unjust enrichment.
Read about some examples of unjust enrichment.
Find out the issues in a case of unjust enrichment.
Resulting Trusts: your other option.