Tag: Ownership Separation

The definition of “common law” couples differs depending on which legal rights are in question, and it is possible to be considered “common law” in one context, but not another. For family law purposes, we look to Ontario’s Family Law Act. Perhaps surprisingly, Ontario’s family law regime does not recognize the term “common law relationship”. While it is a vernacular that has developed over the years in both colloquial language and case law, what we are ultimately concerned with is the legal definition of “spouse”.

More confusingly, the definition of “spouse” changes throughout the Act. With respect to the property regime, “spouse” only refers to married couples, meaning that unmarried couples are not entitled to a division of property acquired throughout their relationship.

With respect to spousal support, unmarried couples are considered “spouses” if they have either:

1. Cohabited for at least three years; or
2. Have a child together and have cohabited in a relationship of some permanence.

Additionally, Canada’s Income Tax Act defines common law spouses as having lived together in a conjugal relationship for at least one year. On the other hand, there is no such thing as common law partners for the purposes of estates rights – you will not be entitled to your common law partner’s estate if your partner dies without a will, even if you are considered “common law” in another context.

 Jointly Owned Home

In Kamermans v. Gabor, a recent case from Woodstock, Ontario, Justice Heeney dealt with a common scenario for unmarried couples: the parties jointly purchased a “fixer-upper” home, with the male partner placing a deposit on the purchase price in the neighborhood of $70,000.00. The parties then jointly obtained a mortgage to finance the balance. Title of the home was placed in the parties’ names as “joint tenants”, which affords either spouse the right of survivorship in the event of the other’s death, as opposed to registering title as “tenants in common”, which guarantees the spouses a percentage interest in the home.

Both parties spent roughly equal time and expenses improving and renovating the property, which increased its value. The parties sold the home at a profit post-separation, with the majority of the proceeds of sale remaining in a trust account, until the parties determined how to split the proceeds.

The issue: the female partner instantly acquired equity to the home. If the parties split the proceeds equally, the male partner loses his significant deposit on the purchase price, resulting in a windfall in the female partner’s favor.

Given that the parties were not married, they could not look to the Family Law Act for an equal division of property. Instead, the male partner was forced to rely on equitable principles that have developed in case law over the years, particularly a principle called a “constructive trust”. Ultimately, the judge in this case found that the female partner was unjustly enriched by the male partner’s deposit, and there was no legal reason for her to enjoy this enrichment. The male partner recovered his deposit as a result.

Constructive trust claims are notoriously complex and difficult to prove. The lesson we can glean from this case: this issue could have been avoided with a valid cohabitation agreement.

If you need advice regarding common law relationships or you are concerned about a related family law issue, please contact one of our experienced family law lawyers online or directly at (416) 449-1400.

“This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.”