Unlike some provinces in Canada, Alberta does not have legislation dealing with the division of property when a common-law relationship breaks down.
That doesn’t mean that people in common-law relationships don’t have property rights if they separate, it just means that those rights are not governed by legislation.
The property rights of people in common-law relationships are instead governed by past court decisions, sometimes referred to as “judge-made law”. To make a claim against property acquired in the name of only one person during a common-law relationship, or property owned by one person prior to the common-law relationship that has increased in value during the relationship, a person must make what’s called an “unjust enrichment” claim.
For an unjust enrichment claim to be successful, a person must prove three things:
Their common-law spouse has been unjustly enriched due to the contributions and/or acquisitions during the relationship by the person making the claim;
The person making the claim has suffered a corresponding deprivation; and
There is no juristic reason for the unjust enrichment.
If unjust enrichment can be proven, then there have historically been two remedies available: constructive trust, and quantum meruit.
A constructive trust is where one person in the relationship is deemed to be holding specific property “in trust” for the other person in the relationship. Quantum meruit on the other hand translates roughly as “fee-for-services” which means a dollar value is assigned to the contributions made during the relationship by the person claiming unjust enrichment.
A recent Supreme Court of Canada decision however, has arguably expanded the remedies available under an unjust enrichment claim.
The Court pointed out in their decision that “not all unjust enrichments between common-law spouses fit comfortably into either a ‘fee for services’ or ‘share of specific property’ mold”.
The Court went on further to say that “where the unjust enrichment is best characterized as an unjust retention of a disproportionate share of assets accumulated during the ‘joint family venture’ to which both partners have contributed, the monetary remedy should reflect that fact”. In theory, this means that monetary awards may be higher as the amount awarded will take into account the value of all wealth accumulated during the relationship, and not simply calculate a fee for the “services” provided by the common-law spouse who is left with little of the property upon the breakdown of the relationship.
What is essential however, is that there is a link between the contribution of the party claiming unjust enrichment and the accumulation of wealth.
It is also important to remember that the mere existence of a common-law relationship does not entitle one person to share in the other’s property, nor is there a presumption of equal sharing even if some division of property is warranted.
In their recent decision, the Supreme Court of Canada pointed out that “where wealth is accumulated as a result of joint effort, as evidenced by the nature of the parties’ relationship and their dealings with each other, the law of unjust enrichment should reflect that reality”.
It is the specific facts of each case that will determine the division of property, if any, upon the breakdown of a common-law relationship.
Legally Speaking appears every second week in LIFE. It is intended for information purposes only. Readers with a specific legal problem should consult a lawyer. This week’s column was written by Danielle M. Elder, of the Red Deer law firm Duhamel Manning Feehan Warrender Glass. Elder can be reached at 343-0812 or at www.reddeeraltalaw.com