As a common Law Partner you are entitled to claim for any contribution either financial or non-financial made towards the property. This means as a common law in Ontario you cannot claim equal division of property but you can seek compensation for your contributions made towards acquiring an asset, which could possibly be less than equal division.
The legal principle for division of assets for common law are governed under the laws of equity. Three Equitable principles apply to Common Law Relationships.
- Resulting Trust
- Constructive Trust
- Unjust Enrichment.
Resulting Trust
A Resulting or Constructive Trust are legal principles of law applicable where someone may have a share in a property when the legal title is registered under the sole name of other partner.
A Resulting Trust situation would arise if one party contributed towards the down payment of the house but was not on title as owner of the house. An example would be where Partner “A” paid $150,000.00 and Partner “B” paid $50,000.00 towards a $200,000.00 down payment for a purchase of a house in the name of Partner “A”. In the event of Separation Partner “B” could only claim $50,000.00 contribution made toward the purchase of the house. It is important to note that the even though such contribution was made by Partner “A”, the presumption was rebuttable.
The Resulting Trust presumption would only arise if it could be established through clear evidence that the intention for the contribution was for Partner “A” to hold the title on trust on behalf of Partner “B” in light of the contributions made.
Constructive Trust
A constructive trust situation would arise where one partner has contributed towards the value of the property. The principles applicable to constructive trust are more complex. In simple language if Partner “B” made payments towards the mortgage instalments, or made payments for a substantial improvement to the property, such as home renovations then the presumption of constructive trust would arise. This is to be distinguished from a situation where partner B only contributes towards grocery and household expenses.
In courts opinion it would be unusual for someone to pay another mortgage or pay for home renovations with no financial again as oppose to paying for grocery.
Unjust Enrichment
An unjust enrichment situation would arise where one partner may have sacrificed his/her career to look after the children to help the other partner grown in his/her business or work. In essences one partner financially benefited from the efforts of the other partner. The difficulty with unjust enrichment is quantification of benefit and loss. It is difficult to quantify the compensation for common law partner.
