Provisions for common-law couples continue to evolve
By Erin Simpson
According to the Statistics Canada 2011 Census, the nuclear family is no longer the norm and the number of married couples is declining. With an increase in the number of common-law couples – defined in s. 29 of the Family Law Act as a couple who has cohabitated continuously for a period of not less than three years or a couple in a relationship of some permanence, if they are the natural or adoptive parents of a child – also comes the potential for an increase in the number of legal arguments surrounding division of property in the event of separation.
This is because the property provisions of the act apply to married spouses only. Division of property upon separation for common-law spouses is a grey area of that law that continues to evolve to this day.
There is an automatic entitlement for married spouses to share in their spouse’s property upon separation. Section 5 of the act provides for an equalization of the spouses’ net family properties.
There is no automatic right to the division of property for common-law spouses who are separating. Historically, if one common-law spouse wanted to share in the property of the other spouse, he or she would have to make a trust claim to the specific piece of property he/she wanted to share in. For example, the claimant spouse would have to demonstrate that he/she contributed money or services of value toward the acquisition, maintenance or improvement of the property for which he/she cannot be compensated monetarily.
It would have to be established that the contributions made by the claimant spouse left the other spouse unjustly enriched for no legal reason. Only then could it be found that the claimant spouse has an interest in the property of the other spouse and is entitled to a division (equitable or otherwise) of the property.
In a landmark decision released in 2011, the Supreme Court of Canada has made it easier for common-law spouses to share in the wealth accumulated during the relationship. In Kerr v. Baranow and Vanasse v. Seguin, the court held that if a party can demonstrate that the relationship operated like a marriage (or a “joint family venture”) then there would be no need to show a specific link between the party’s contribution and the specific property to be shared. Read Kerr v. Baranow… Read Vanasse v. Sequin
In order to determine whether the family functioned as a “joint family venture,” four factors must be considered including mutual effort, economic integration, the intent of the parties and the priority of the family.
While the law continues to evolve we may see more common-law couples entering into cohabitation agreements in order to clarify what their intent is. One reason why we find people do not get married is so they do not have to share their property with their spouse.
Now that it is easier for common-law spouses to make a claim for division of property, entering into a cohabitation agreement can assist the parties with establishing how the household finances will be addressed (thereby addressing the economic integration factor); what, if any, property the parties intend to share and how it is to be shared (equitably or inequitably) and the mutual expectations of the parties moving forward.