Cohabiting/Common Law Couples: How Your Rights Compare to Married Couples
Although you may believe that as a common law spouse, you have the same rights and obligations as married spouses, this is not true. It’s critical to understand and recognize Ontario common law and the distinctions between married spouses and cohabitating partners in order to safeguard yourself if your relationship dissolves.
We at DivorceLawyers.ca Professional Corporation understand the specifics of common law and cohabitation agreements in Ontario, having represented clients for over 20 years. Our attorneys can offer you with valuable information about your rights as a common law spouse / partner in Toronto, Mississauga, Markham, Oakville, Vaughan, and the surrounding areas in Ontario and help safeguard these when it comes to property and assets, child custody, child support, or common law separation in any legal matter that concerns them.
When Are You Considered Common Law in Ontario?
Two people in Ontario, Canada are considered common-law spouses if they have been living together in a conjugal relationship for at least three years. They only need to have lived together for one year if they have a kid together by birth or adoption.
What Is a Conjugal Relationship in Canada?
In Canada, a conjugal relationship is more than just a sexual relationship. A “conjugal relationship” in Canada is one in which two people live together, manage their money, maintain social ties with friends, and have an emotional connection in addition to a sexual relationship.
Ontario Common Law & Family Property
Under the Family Law Act (FLA), financial gains from the marriage are divided equally. The net family property is determined for both spouses, and the wealthier spouse pays half of the difference to the poorer spouse. Judicial supervision is limited, and spouses are free to dispose of assets other than their marital home under the FLA property regime. Only married persons and not cohabitating partners may benefit from an equalization of family property, however.
This distinction, however, has been called into question. In Nova Scotia v Walsh, the Supreme Court of Canada found that the difference between married and cohabitating couples is not discriminatory since married spouses have chosen to enter into a marriage rather than live common law.
There are, however, common-law remedies for cohabitating spouses available: the constructive trust that arises out of an unjust enrichment (Becker v Pettkus). A constructive trust allows a cohabitating spouse who is not on title to acquire a right to property in a certain asset, such as the marital home. Thus, if a cohabitating spouse has stayed at home with the kids and done the majority of domestic duties, they may be reimbursed or given a constructive trust over the marital home where their efforts are linked to the house itself.
A spouse seeking a constructive trust order must establish four requirements:
- They acquired a legal title to the property in question by contributing money or labour;
- When one spouse enriched another, that person was harmed in turn;
- There is no legal explanation for the enrichment (anything that might explain the difference, such as a contract or gift); and
- A direct relationship exists between the expenditure incurred and the acquisition or improvement of the property in issue.
Without the fourth condition, courts will only award money damages, rather than the property itself. Finally, courts attribute a portion of the loss to each party according on their contribution.
Possession of the Matrimonial Home
Exclusion of the matrimonial home from all other assets is notable. Both spouses have equal right to possession, independent of which spouse owns the marital home (s. 19 FLA). Even a marriage contract drawn up before the marriage/cohabitation period will not be enforceable (s. 52(2) FLA). The court can grant exclusive possession regardless of who has legal ownership of the marital home (s. 24(1)(b) FLA). Because there may be a need to evict one spouse in order to prevent domestic violence or intervene regarding the influence on children, the law protects possessory rights in the marital home.
The court must balance the following factors in determining whether to grant an exclusive possession order:
- The greatest advantage of the children concerned;
- Any existing orders or support orders affecting family property will be canceled;
- Both spouses’ financial situations;
- Any written agreement between the parties must be in writing;
- Other suitable housing may be found;
- Whether a spouse has engaged in any sort of physical or emotional abuse against the other partner or their children.
Unmarried cohabitating spouses, on the other hand, do not have access to the same possessory rights as married spouses under Part II of the FLA because they are not defined in that part. Fret not; unmarried cohabiting spouses have several alternatives available to them.
Section 29 of the Family Law Act permits spouses who reside together for at least 3 years and are in a relationship of some permanence, if they are natural or adoptive parents of a child, to apply for the marital home as part of spousal support. The court has the power under s. 34(1)(d) of the FLA to make an interim or final order regarding the matrimonial home.
Second, while cohabiting spouses do not acquire exclusive rights to the home, they may acquire a constructive trust in the marital home that provides each spouse a shared equitable interest in the property and therefore joint possessory rights in the house (equal right to live in it).
Third, the court may issue an interim or definitive restraining order against a person who is in a spouse/former spouse relationship with the applicant, or who is residing together or has cohabitated with the applicant for ANY length of time (s. 46(2) FLA). If the applicant has reasonable grounds to fear his or her own safety or the safety of any kid in his or her care, he or she may obtain an interim or final restraining order (s. 46(1) FLA).
Finally, in certain situations, if a cohabitant is charged criminally, bail conditions may prevent them from returning to their marital home. In essence, the common law has swooped in to right many of the wrongs generated by two separate systems for married and unmarried cohabitating spouses.
Common Law Relationships & Division of Assets
The Family Law Act R.S.O. 1990, c. F., only applies to spouses who meet the criteria set forth in s. 1(1), which pertains to net family property equalization:
- “Spouse” means either of two individuals who are married to each other.
- are married to each other, or
- Both spouses must have previously entered into a marriage that is voidable or void, in good faith on the part of one relying on this clause to assert any right.
- A marriage that is actually or potentially polygamous is considered to be a marriage if it was lawfully validated in a jurisdiction whose legal system recognizes it as valid, according to the definition of “spouse.”
What happens to property acquired during a common law relationship when the lovers split up? In general, property is owned by the individual who holds legal title to it and is divided on that basis. There is no need for a net family property calculation or an equalization payment in situations where there is a separation.
If you are in a typical relationship and believe that you should be entitled to an interest in or compensation for any contributions made to the purchase, preservation, or maintenance of property, there are several choices open to you.
You may do the following:
- Make sure to ask your spouse for any contributions you’ve made towards the home, both financial and non-financial.; or
- If your partner refuses to repay you, you may take him or her to court and make one of the following allegations.:
- Resulting trust is formed;
- trust based on what you can do; or
- Unjust enrichment.
Resulting Trust
When one person pays for (or assists pay for) a piece of property but legal title is vested in another individual, a trust is created. It would seem wrong to not allow the individual who funded the acquisition, in whole or part, to retain some interest in the property. As a result, he or she becomes the beneficial interest holder and it is assumed that the legal title holder is the trustee for him.
When the divorce happens, any interest accrued on top of the contribution is refunded. This implies that if one spouse paid for it, the courts may decide whether it should be jointly owned or entirely owned by that spouse.
In a 1980 decision, the Supreme Court of Canada declared that where the court is satisfied that there exists a common intention expressed by the words or conduct of the parties, and that this intent cannot be established solely on the basis of specific language or conduct, a resulting trust will be found.
In conclusion, a resulting trust is a rebuttable presumption that when the contributions were made and accepted, both parties intended for there to be a resulting trust in favor of the donor calculated according to the value of the contributions made. When funds are taken from a joint bank account into which both spouses have contributed money, clear evidence showing that there was “common agreement” may be found.
Constructive Trust
A constructively beneficial trust allows someone to share in the value of property (or get an interest in it) even if he or she does not own legal custody. This is because the individual has made contributions to the property’s worth through work, money, or other means, making it unjust for him or her to be deprived of a portion of its value (or rise in value).
Instead of relying on proof of a shared goal, a resulting trust does not require evidence of an agreement to create it. Only when the Supreme Court of Canada’s test is fulfilled may courts establish a constructive trust.
The test is based on the concepts of unjust enrichment:
- Both spouses must be enriched.;
- The other partner is deprived of a corresponding share; and
- There is no legal or ethical justification for the increase. Please keep in mind that a legal basis would be required:
- Making a gift; or
- The presence of a contract.
The next stage is to establish a causal link between the contribution made and the property. If this connection can be proved, a constructive trust will result.
Ask: “Did her/his involvement in the transaction qualify as substantial and direct enough to entitle her to a share of the profits earned on X and/or an interest in X?
You should be aware that a contribution might not always take the form of a donation to the property’s purchase. A dedication, for example, may suffice if it is in reference to the preservation, maintenance, or improvement of the property.
The amount of the interest must be proportionate to the spouse’s contribution to the trust. The shares will be uneven if the contributions are not comparable.
Non-financial contributions may be in the form of goods or services. They may come from individuals, businesses, or other organizations:
- The best interests of the children must come first when it comes to child care. The other spouse should be able to work in order for him or her to earn money and buy the property at issue.
- Taking full responsibility for all house chores (cooking, laundry, cleaning) so that the other spouse may focus on his or her job, resulting in an increase in income and property acquisition.
However, to establish a constructive trust, it is necessary that no remuneration was provided and the spouse has no claim.
Unjust Enrichment
Finally, if all else fails, or if it is impossible to show a connection between the gift given and the property in question (usually due to the fact that the connection is of a short duration), a straightforward unjust enrichment claim may be made.
In this case, the courts will employ the three aforementioned rules of unjust enrichment to try and remedy a fundamentally unfair situation where as a result of one person’s efforts, the other will acquire a benefit. The deprived party will receive the value of its contribution. This is also known as quantum meruit and refers to how much the benefitted party would have had to pay for the contributions made by the beneficiary. A common law spouse has no responsibility to serve his or her partner, therefore there is a presumption that such services would be compensated.
