More about the law of Unjust Enrichment
“Unjust enrichment” is the claim for division of property, not held in joint names, at the end of a cohabitation relationship. After a common law or cohabitation relationship has been established, the analysis is:
- Has one party been enriched? This is usually, but not always financial. Examples include acquiring assets or the increase in value in assets; and
- A corresponding deprivation to the other party.
Generally, the deprivation is linked to the enrichment and maybe financial or non-financial.
Here’s an example:
- During their relationship A gives B $40,000 to renovate B’s home. A claims that B has been enriched with the $40,000 and renovations of the home and that A has been deprived of the same money; or
- A is a stay at home mom who does not work outside the home. A may argue that B has been enriched by being able to acquire assets through employment income and that A has been deprived of her time and effort and lack of employment (this also crosses into the issue of spousal support); or
- A paid half of the mortgage, taxes, and utilities on B’s home during the relationship. A argues that B has been enriched by the increase in value and reduction of a mortgage on the home and that A was deprived by the loss of funds.
At times the enrichment and deprivation are obvious, and other times it’s vaguer.
Once the enrichment and deprivation have been established, the third step of the analysis is whether there is a “juristic reason” allowing the enrichment and deprivation. In other words, is there a legally acceptable reason as to why there has been an enrichment/deprivation? For example a cohabitation agreement, gift, employment services contract, or roommate agreement.
If there is no “juristic reason” then the courts can look further to other factors such as the reasonable expectations of the parties, benefits or compensation received by the claimant, and public policy considerations.
Assuming the claim is successful – what does he/she get? This is another complex analysis. This can include a money payment or an entitlement to a specific property. Where there has been a “joint family venture” (after considering factors such as mutual effort, economic integration, actual intent and priority of family) the property at issue may be shared in proportion to the parties’ direct and indirect contributions.
What this means is that what you may be entitled to very much depends on the actual facts of your situation, AND what you and your partner’s lifestyle and finances were like during the relationship. There is also wide discretion for the Judge in the interpretation of those facts and applying the law.
If you are seeking or defending against a claim for a property after living together, documentation is very helpful. Detailed financial records can be of assistance in determining who paid for what, and what the parties’ expectations were.
Alternate Dispute Resolution
The uncertainty and complexity of the law in this area also means there is much room for negotiation and alternative dispute resolution such as mediation.
9 key points regarding the division of property at the end of a common-law relationship (where the property is in one person’s sole name):
- There is no automatic entitlement to property division.
- An enrichment or deprivation can be financial or nonfinancial.
- Each party may have a claim to the others’ property based on contribution.
- The law is complex as each family’s facts and circumstances are very different.
- Homemaking, child care, and housework are not presumed to be a gift or an expectation.
- If the property is held jointly, equal sharing is the starting point but maybe argued against.
- There are time limits (limitation periods) in which a claim must be brought.
- If a claim is successful, there is still no presumption of equal sharing.
- Legal advice is key in bringing or defending against a claim.