Unjust Enrichment

Property Division

Common law partners in Ontario do not have legislated rights to share in property upon separation in Ontario.

The constitutionality of this in another province, Nova Scotia, was decided by the Supreme Court of Canada. This law was challenged on the basis that the different treatment between married and unmarried couples violated the guarantee of equality in the Charter of Rights. The court found that this was not the case, as the distinction reflects the differences between those two types of relationship.

However, this does not mean that unmarried couples in Ontario have no property rights upon the breakdown of their relationship. They can claim that there has been unjust enrichment. As well, in certain circumstances, they can claim a resulting trust.

Unjust Enrichment

An unjust enrichment occurs where one party gains a valuable advantage from another without legal reason. The requirements for a finding of unjust enrichment are:

• one spouse has been enriched,

• there is a corresponding deprivation to the other spouse, and

• there is no legal reason for the enrichment.

The first step is to examine the parties’ common law relationship and the roles each played. A person can argue that she made a contribution, in a collaborative relationship, that ought to be compensated. She will ask for damages or an interest in her partner’s property, or both. In response, her partner may argue that she has done nothing out of the ordinary, and that she was compensated fairly during the relationship.

The contribution. A person’s contribution may have been domestic services, such as housekeeping, child care, unpaid work in her partner’s business, yard work, repairs or renovations, and may also include financial contributions, or quasi-financial contributions such as the purchase of consumables for the family.

Enrichment. As a result of a person’s efforts, has her partner improved his lot? The answer is normally yes, if he has assets, or paid off debts, or improved his property. Almost anything done for a person’s partner will have enriched him somehow.

Deprivation. This is usually the converse of the enrichment. A person will have put herself out caring for her partner’s interests and in the process will have sacrificed her own opportunities, her energy, her free time, her future, and her prospects. There is a presumption in a long-term relationship, in the absence of cogent evidence to the contrary, that the enrichment of one party has resulted in a deprivation of the other.

No legal reason. If a person was under no contractual or statutory obligation to provide the contribution she did, then there is no legal reason for the enrichment.

Related Articles On Common Law Property Division

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.

Remedies – what will a court do if it finds that there has been an unjust enrichment.

Resulting Trusts: your other option.

Got something to say?