Joint family venture and property division in common law relationships

When a marriage breaks down, property division is governed by legislation and there is a high amount of predictability regarding who is entitled to what. However, equalization does not apply to non-married couples. For common law couples, ownership of assets, such as the family home, will therefore come down to the title of the property. But what happens if the non-titled partner made contributions, even non-monetary ones, to the home or family in general?

In certain cases, the common law doctrine of unjust enrichment and the corresponding remedy associated with a “joint family venture” can allow the non-titled partner to get compensated for their efforts. The logic is that when parties intend to have or be in a family together, their contributions might be more than just financial. For instance, one party might be a homemaker while the other party the breadwinner. When this relationship breaks down, how is the homemaker to share in the accumulation of wealth if they are not on title to any of the assets? If the claimant can demonstrate their contributions are connected to the accumulation of wealth, they may be entitled to a share in that wealth proportionate to their contribution. This was provided for in Kerr v Baranow, 2011, SCC 10:

60 …The unjust enrichment occurs following the breakdown of their relationship when one party retains a disproportionate share of the assets which are the product of their joint efforts. The required link between the contributions and a specific property may not exist, making it inappropriate to confer a proprietary remedy. However, there may clearly be a link between the joint efforts of the parties and the accumulation of wealth; in other words, a link between the "value received" and the "value surviving", as McLachlin J. put it in Peter, at pp. 1000-1001. Thus, where there is a relationship that can be described as a "joint family venture", and the joint efforts of the parties are linked to the accumulation of wealth, the unjust enrichment should be thought of as leaving one party with a disproportionate share of the jointly earned assets.

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85 I conclude, therefore, that the common law of unjust enrichment should recognize and respond to the reality that there are unmarried domestic arrangements that are partnerships; the remedy in such cases should address the disproportionate retention of assets acquired through joint efforts with another person. This sort of sharing, of course, should not be presumed, nor will it be presumed that wealth acquired by mutual effort will be shared equally. Cohabitation does not, in itself, under the common law of unjust enrichment, entitle one party to a share of the other's property or any other relief. However, 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.

The gist of the 221-paragraph decision of Kerr v Baranow, 2011 SCC 10 alludes to how the "joint family venture" is dealt with. The big questions: was there unjust enrichment in the relationship (i.e. an enrichment of or benefit to the defendant, a corresponding deprivation of the plaintiff, and the absence of a juristic reason for the enrichment)? Were the parties actually engaged in a joint family venture. The court continues in Kerr v Baranow:

87 My view is that when the parties have been engaged in a joint family venture, and the claimant's contributions to it are linked to the generation of wealth, a monetary award for unjust enrichment should be calculated according to the share of the accumulated wealth proportionate to the claimant's contributions. In order to apply this approach, it is first necessary to identify whether the parties have, in fact, been engaged in a joint family venture. In the preceding section, I reviewed the many occasions on which the existence of a joint family venture has been recognized. From this rich set of factual circumstances, what emerge as the hallmarks of such a relationship?

Evidence of a joint family venture exists when there was a mutual effort of the parties towards common relationship goals; if there was a degree of economic integration between the parties, such as having joint assets; if the parties had an actual intention to be engaged in a family venture and to share in their accumulated wealth; and finally, the degree to which the parties prioritized family. A brief summary was provided for in application to the facts in Geertsma v Smith, 2011 ONSC 5521:

80 Mutual effort can include collaboration and I find that there is evidence to support the view that the parties worked collaboratively toward common goals. This included their co-operation in parenting and child-rearing duties, their joint home improvement efforts, the sharing of payment of expenses and the length of their relationship.

81 In terms of economic integration, I find that this feature was largely absent in the parties' financial arrangements. They kept separate bank accounts, allocated responsibility for expenses rather than pooled financial resources and I did not get a sense from the evidence that the parties regarded their life together as a single economic unit.

82 As for actual intent, my impression was that the parties deliberately chose not to become economically intertwined. I also find that the respondent chose not to join in the house purchase. It appears that the possibility of marriage was raised occasionally. I note the respondent's comment that spending $10,000 on a wedding did not seem like a good investment. I infer from the evidence that the respondent preferred his single status.

83 Finally, the question of priority of the family often relates to self-sacrifice in some fashion and there is little evidence to support the view that the respondent's interests were subordinated to the greater good of the family although I recognize that the applicant's time away from the home working two jobs or taking courses likely meant additional childcare responsibilities for the respondent.

The court does clarify, however, that parties must be aware of the "mutual conferral of benefits", or the fact that, typically, both parties are getting benefits from the other in some way. In other words, in the calculation of fair compensation for a joint family venture, the benefits received by both parties should be examined:

48 First, the fact that many domestic claims of unjust enrichment arise out of relationships in which there has been a mutual conferral of benefits gives rise to difficulties in determining what will constitute adequate compensation. While the value of domestic services is not questioned (Peter; Sorochan), it is unjust to pay attention only to the contributions of one party in assessing an appropriate remedy. This is not only an important issue of principle; in practice, it is enormously difficult for the parties and the court to "create, retroactively, a notional ledger to record and value every service rendered by each party to the other"

Obvious takeaways? A joint family venture may be found where both parties who are not married worked together during their relationship to accumulate wealth. The non-titled spouse may be able to obtain compensation based off of principles of unjust enrichment.