On February 18, 2011 the Supreme Court of Canada released an important decision that helps clarify the economic and legal realities in many common law relationships. The law in Ontario, like many other provinces in Canada, does not give common law partners automatic rights to a share of each other’s property – no matter how many years they have lived together. But our highest court has now recognized that unmarried spouses, who work together for the common good of the “family enterprise”, should both be compensated for their contributions to the family’s wealth if their relationship breaks down.
This case involves the 12-year common law relationship of an Ontario couple with 2 children. In the middle years of the relationship the wife took a leave of absence from her career to move with the husband so he could pursue a business opportunity in another province. It was during this 3½ year period that the couple’s 2 children were born. The wife stayed home to care for the children and the family home while the husband spent his time growing his business. As the trial judge put it: “She was the C.E.O. of the kids and he was the C.E.O. of the finances”.
The Supreme Court of Canada found, on the facts of this case, that the couple were engaged in a “joint family venture”. The common law husband would be “unjustly enriched” if he were allowed to keep all the proceeds of his business. Since the common law wife made an equal contribution to the venture, she was entitled to a share of the wealth accumulated in her husband’s name during this 3½ year period.
While the common law wife in this case had to pursue her claim through 3 levels of court before her legal entitlement was confirmed, this decision provides needed guidance for lawyers and for common law couples facing similar situations in the future.