When it comes to separations between common law couples, the law treats the separation much differently from that of married couples. Should a married couple divorce, the law imputes an equalization process wherein both spouses walk away from the marriage as financial equals. This is not the case with common law separations where each partner will walk away from the relationship with their own assets and debts (absent a cohabitation agreement). However, if one common-law partner made sacrifices that benefited the other partner without receiving any kind of compensation, they may have a case for unjust enrichment.
For example, you and your common-law partner are living in a home owned by your partner, but you alone paid for significant renovations to that home. If you were to separate and your partner was permitted to keep the home (and therefore its market value), your partner may be considered unjustly enriched because you paid for the renovations to the home that increased its market value, but you received no compensation for doing so.
To determine whether unjust enrichment has occurred, the court will apply the test outlined in Garland v. Consumers' Gas Co. First, it must be established that the defendant was enriched. Second, it must be established that the plaintiff experienced a deprivation. Third, there must not be a juristic reason for the enrichment. This means that the enrichment cannot be the result of a contract, gift, etc. The defendant then has an opportunity to show that there is another reason why the plaintiff should not be compensated. If all three elements are found to have occurred and the defendant fails to present a reason against compensation, it will be decided that the defendant was unjustly enriched.
If the court finds that your partner has been unjustly enriched, you may receive a monetary award or a constructive trust. A monetary award will be granted if the court deems that money can compensate you for the deprivation you experienced. If a monetary award is insufficient, then a constructive trust may be awarded instead. This may be the case if your partner lacks the means to compensate you financially or if there is a unique property in question wherein money could not compensate you accurately.
If you’re experiencing an issue involving unjust enrichment, our skilled and experienced team can help. Please email us at firstname.lastname@example.org or call us at 905-215-1905 to book a consultation.