As faithful readers of this website will have noted that common law couples who have property claims against each other, must use various equitable claims against the other in the absence of their entitlement to relief under the Family Law Act.
While The Family Law Act grants very similar spousal and child support rights to both common law and married couplesthat similarity does not apply to property claims.
Couples who are formally married are governed by a relatively rigid formula set out in the Family Law Act. That formula, is talked about elsewhere on this website. However, common law couples upon separation must look to equitable law that has evolved over hundreds of years to determinetheir relief. These equitable remedies have many names, including unjustenrichmentand since the Supreme Court of Canada decision in Kerr and Baranow, the concept of family joint venture.
When making a joint venture argument, to be successful, the proponent must first convince a court that there was such a joint family venture accumulating assets. In essence, a mutual effort was made by the parties or that wealth was accumulated as a result of a joint venture. The court would look at the nature of the parties’ relationship and their dealings with each other. If the court finds that there was such a joint venture, then the court finds whether or not that joint family venture has resulted in a disproportionateaccumulation of assets. In other words, even though it was a joint effort, far more of the assets are registered in oneparty’s name than the other.
While what we have described above seems rather imprecise, it is simply a reflection of the current state of law. It leaves it for the courts to throw a legal net over a common law couples’ relationship in an effort to construct a legal basis for justifying a fair division of assets. Certainly for the last six years, these cases have become ever more prevalentand consume a larger portion of the court’s time.
Parties far more politically connected than this author have predicted that the inevitable result of these expensive court cases will lead sometime in the future to place common law couples, in other words, parties who cohabit for a certain length of time (and for the issue of spousal support it is three years) legally under the same umbrella as married couples. Simply put, we predict the law will change to equally treat the property rights of common law and married couples.
The warning that we would give to one and all is that common law couples, especially where one brings a disproportionate wealth into the relationship, if they wish that wealth to be protected must have a properly prepared domestic contract.
The alternative is when faced with the end of the relationship, expensive litigation may very well follow.